LONDON (Alliance News) - Green Dragon Gas Ltd Thursday said production increased in the first half of the year as it continues to connect new wells to its network and said sales were up alongside prices.
The China-based gas producer said gross production in the first half of 2015 totalled 4.87 billion cubic feet of gas, up 18% from the 4.10 billion cubic feet produced a year earlier.
The company is currently implementing a 30 well LiFaBriC programme. A total of 18 wells were drilled in the first half, only one of which was a LiFaBriC well. However, a further 8 LiFaBriC wells were connected to its infrastructure in the period.
LiFaBriC is a a technique developed by AIM-listed Greka Drilling Ltd, which is an adaptation of the horizontal drilling methods traditionally used for drilling in coal seam reservoirs and is designed to provide a precise and high-quality completions' technique. It was designed specifically for Chinese geology.
In total, Green Dragon has 67 wells connected, which is up from only 59 wells at the end of 2014. It has hundreds of more wells to be connected to its network.
"Our focus during the last six months, together with our partners, has been on infrastructure and connecting our wells to the network, which is key to delivering a step-up in our production and cash flows," said Chairman and Founder Randeep Grewal.
In the downstream segment, Green Dragon piped 2.65 billion cubic feet of natural gas in the first half, up 10% from the 2.40 billion cubic feet sold a year earlier, whilst compressed natural gas sales rose to 335 million cubic feet from 309 million cubic feet.
As well as sales increasing, Green Dragon achieved better prices in the first half of around USD19.51 per million cubic feet of gas, up from USD17.82 per million cubic feet a year earlier.
"We are continuing to benefit from a strong gas price on the Chinese market, unaffected by the recent market volatility. Furthermore, fundamentals remain in place to ensure that the high demand in the region sustains the long-term performance of the gas price in what is one of the world's most buoyant energy markets," said Grewal.
Green Dragon shares were up 1.1% to 300.05 pence per share on Thursday. Greka shares were up 0.8% to 6.30p.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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