SINO Gas & Energy has secured a $50 million loan from Australia’s Macquarie Bank to help fund its share of work on the Linxing Production Sharing Contract (PSC) and the Sanjiaobei PSC, held under the Sino Gas and Energy Limited Joint Venture.
Sino Gas chairman Gavin Harper said the company was well positioned for the future of the project, located in the Ordos basin in China’s Shanxi province.
“With $57 million in cash as at the end of the June quarter and the facility of up to $50 million, Sino Gas is well positioned to fund its development share of the PSCs towards early production and overall development plan submissions and start the transition to becoming a significant gas producer,” he said.
The company had made good progress on its pilot production program, with net pay of between 25 metres and 28.2 metres detected during wireline log testing of three wells on the project.
However, the number of wells Sino Gas & Energy planned to drill during the pilot program was expected to be reduced due to an improvement in flow rates –following an optimisation of fraccing techniques.
“This will allow the operations team to focus on connecting existing wells into the pilot program, as the majority of the wells scheduled to be hooked up in 2014 have already been drilled.
“Once these wells have been successfully connected and gas flow established, the pilot production program is expected to be expanded through the connection of additional existing wells and those planned to be drilled in early 2015,” the company said in its monthly operations report.
The news came following the appointment of a new chairman for the company in Philip Bainbridge, with former chairman