LONDON (Alliance News) - Green Dragon Gas Ltd Tuesday said it has managed to grow its gas reserves in China for the tenth consecutive year after conducting its annual audit.
Green Dragon Gas produces coalbed methane gas in China and said the most recent audit has shown the tenth consecutive year of growth to its gas reserves, coinciding with the company's tenth year listed on the London Stock Exchange.
Green Dragon said net 1P reserves, also known as proven reserves, increased 17% to 173.0 billion cubic feet of gas from the previous reserve of 148.0 billion cubic feet.
Proven plus probable reserves, also known as 2P reserves, grew 29% to 549.0 billion cubic feet of gas from the previous reserve of 427.0 billion cubic feet, whilst 3P reserves rose 4% to 2.37 trillion cubic feet of gas from the previous reserve of 2.29 trillion cubic feet. 3P reserves add possible reserves to the proven and probable.
"I am pleased to announce the results of the 2015 reserves evaluation which represents the tenth consecutive increase in both 1P and 2P reserve volumes since coming to market in 2006. In that period the company has shown consistent reserve growth and, importantly, the continued progression of reserves to the 1P and 2P categories," said Randeep Grewal, chairman and founder of the company.
The company's Chengzhuang block saw its 1P reserves fall slightly in 2015 to 15.00 billion cubic feet of gas from 16.00 billion cubic feet at the end of 2014, but saw both 2P and 3P reserves rise.
The Shizhuang South block still holds the majority of Green Dragon's 1P reserves, totalling 153.00 billion cubic feet following the recent audit compared to only 132.00 billion cubic feet at the end of 2014. That block also saw a material rise in 2P and 3P reserves.
The company also managed to declare its first 1P reserves at the Shizhuang North block, totalling 5.00 billion cubic feet of gas. At the end of 2014, the block only had 3P reserves.
Green Dragon did not declare any 1P reserves at its final block, Fengcheng, but managed to convert some of the 3P reserves in the block into 2P reserves.
Importantly, the net present value of all of its reserves were lower at the end of 2015 than they were in 2014. The most recent audit suggested the net present value of the company's 1P reserves has fallen to USD1.22 billion from USD1.46 billion, the value of the 2P reserves has dropped to USD4.02 billion from USD4.29 billion and the NPV of the 3P reserves fell to USD16.21 billion from USD21.18 billion.
Green Dragon said the main reason the NPV fell despite the rise in reserves was due to the impact of currency conversion resulting from the devaluation of the yuan compared to the dollar.
Earlier this month, Green Dragon launched an infrastructure programme to allow the company to utilise its existing wells and boost production and sales without the need for capital intensive drilling or investment.
Green Dragon reported a 24% rise in overall production in 2015 to 10.3 billion cubic feet compared to only 8.3 billion cubic feet in 2014 as the company continued to deliver consistent year-on-year rises.
Green Dragon drills its wells using technology developed by fellow London-listed Greka Drilling Ltd. Green Dragon Founder Grewal is also the chairman of Greka Drilling, and is also the chairman of other London-listed firm Greka Engineering & Technology Ltd.
Green Dragon shares were down 0.8% to 264.50 pence per share on Tuesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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