AN INDEPENDENT assessment of Sino Gas & Energy’s reserves in China’s Ordos basin has returned a 227 per cent on the proven and probable (2P) reserves previously estimated.
Carried out by Australian evaluation company Risc Operations, the study put 2P reserves in Sino Gas & Energy’s two operated production sharing contracts (PSC) at over 1 trillion cubic feet, up from the 327 billion cubic feet estimated in March 2013.
Sino Gas & Energy, which operates the fields in partnership with Hong Kong-listed MIE Holdings Corporation, has a stake of 291 billion cubic feet of gas from the Linxing and Sanjiaobei PSCs, located in China’s Shanxi province.
Risc also increased the best estimate contingent resource for the PSCs by 32% from 2.2 Tcf to 2.9 Tcf, lifting Sino Gas & Energy’s stake to 850 billion cubic feet.
The best estimate probable prospective resources rose 25% from 3.2 Tcf to 4 Tcf – with Sino Gas & Energy’s stake lifting to 1 Tcf.
The increase during the year was driven by step-out drilling that increased the area of contingent resources and the seismic programs which almost doubled the percentage of acreage classified as prospective.
Sino Gas & Energy’s share of project expected monetary value increased by 45% during 2013, from US$1.6 billion to US$2.3 billion.
Company managing director Robert Bearden said he was looking forward more delineation and production wells being drilled, as well as the commencement of pipeline production in 2014.
“2014 is shaping up to be another transformational year, with a US$137 million capital works program designed to complete initial Chinese Reserve Report (CRR) submissions and commencing pipeline sales across both PSCs,” Sino Gas & Energy said.
“The agreed work program, which will now be put forward to the respective PSC Partners’ Joint Management Committees (JMC) for approval, almost doubles the number of wells to be drilled from the previous year and completes the seismic required for the first round of CRR submissions.”
Sino Gas & Energy had already completed the seismic surveying and acquisitions earmarked for 2014, with eight rigs currently mobilised in the field, ready to commence drilling in March.
“It is anticipated that the majority of the wells to be drilled in 2014 will be hooked up into the early production system, which is planned to ramp up in the second half of the year and become an increasing source of cash flow for the projects,” the company said.