The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
It may take a few days for the market to digest all the information but when they do $$$$$$$$$$$ Highlights: · Interests of GDG and CUCBM now aligned with both companies to work together in order to maximise the value within the PSCs which continue in full force and effect · Secures interest and revenue share of the approximately 1,600 wells drilled by CUCBM in line with PSCs · CUCBM committed to invest a further US$100 million into GSN in return for an additional 10% working interest (in addition to an estimated US$100 million invested to date) · CUCBM committed to ongoing cooperation with GDG with full information sharing across wells drilled on PSCs and all local assistance · PSC exploration terms extended for a further 2 years · GDG expects US$250 million additional investment in GSS from CUCBM The Chinese government have now officially partnered with Green Dragon Gas and have confirmed they will be spending several billion over the coming years in the further development of these gas fields.
Great news for all the group companies !
O well
I would rather the hours as it's got under my skin now,but could just about hold on to Easter ! With all that's been said over the past couple of weeks I think its the real deal now. Fingers crossed now not required !
Benefits within first quarter !Today 09:12By Philip Whiterow 21 January 2014 Unconventional gas supplier Green Dragon Gas (LON:GDG) has seen production surge due largely to the activities of third party drillers on its acreage in China. Total gas production for 2013 including third parties was 7.19 billion cubic feet (Bcf), a 304% increase over 2012's 1.78 Bcf. The company had already indicated its 5 Bcf target would be exceeded. Of that, Green Dragon’s own production rose by 11% to 2.9 Bcf. In the last three months, standalone gas production rose by 1.5% to 772 million cubic feet (mmcf) quarter-on-quarter. The company is currently carrying out a financial audit of all of the activity undertaken on its licences and is in talks with third parties over the receipt of technical and operational data necessary to complete this on all of its acreage in China. Production from third party wells already reviewed by Green Dragon exceeded 4.40 Bcf in 2013 and the company expects to conclude the related net economic benefits from these within the first quarter of 2014. THATS MONDAY !!
30 did mean something but I uggered if I can remember what !
Thanks smiffy for taking the time to work the numbers. Good stuff.
So what's the contract worth any thoughts ?
Yes very and autos as well. Is there more to come,if we see a continuation of buys there may be news to follow.
Looks like we may have lift off !
It works testing 123 Interesting but what does it mean in cash terms
It's on the GDG web but you have to email the broker on the link for a copy. (It's under financial reports)
Last week, we visited an area within GDG’s licences that has been subject to third- party development and production of gas by several of China’s state owned enterprises (SOEs), including CNOOC, CNPC, PetroChina and CUCBM. The extent of this work is considerable. Our trip enabled us to visit multiple producing well sites that supply the integrated production facility (IPF) in the core area at GSS that has been developed by GDG. In addition, and arguably more importantly, we also had the opportunity to visit a separate area in the south of GSS, which has been one of the areas of focus for the SOE activity and where several hundred wells and associated infrastructure have been installed. Although we were unable physically to visit every third-party well site (there are c1,500), from what we saw we believe it is likely that the data received so far by GDG concerning the activity carried out by the SOEs will result in material new production, revenue and reserves net to GDG. The exact quantum, and how GDG will benefit from the economic uplift, are yet to be established; however, given the support from the PRC for the validity of GDG’s PSCs, we find it difficult to see how the outcome for GDG will be anything other than positive. Valuation and recommendation: Although guidance on net reserves and incremental production data covering some of the reviewed wells has been provided, we do not yet have sufficient data on the third-party activity or on how the benefits of this work will flow back to GDG in order to factor it into a revised valuation. However, what we can say with conviction is that we believe in the coming months Green Dragon will be a net beneficiary of the work undertaken by the SOEs, with a strong chance that it will be materially NAV- and financially accretive for the business. We reiterate our Buy.
(GDG) Site visit confirms scale of third-party activity Last week we visited Green Dragon’s GSS block, and our overall impression of the work done by other operators is that it is considerable. Specifically, we visited the southern part of GSS and observed tens of the many hundreds of wells that have been drilled within GDG’s PSC area, along with the extensive gas gathering and export infrastructure that has been installed to produce, export and sell CBM gas from the area. We reiterate our Buy recommendation and 369p target price.
Sea of blue !!!! All coming together very nicely now and GDL to follow !!
I belive after the presentation this week investors will start to understand the waters that were mudy have now started to to run clear ! The opportunity to now get back on tract and make some serious money have returned. GL
Thanks,its been a long and painful journey but we are almost there now ! Big rewards for anyone entering at this current SP.
In early 2011, CUCBM said it was ending Green Dragon’s five production sharing contracts (PSC), including at the producing GSS block, a decision that could have essentially ended Green Dragon’s China business. CUCBM management reportedly thought Green Dragon was moving too slowly with exploration and development. Green Dragon stood its ground, arguing that it had fulfilled its commitments at the blocks and CUCBM did not have the authority to void its licences. It took its case to the State Council, China’s top decision-making body. But as the dispute rumbled on the company’s share price fell from over £8 ($13.20) a share prior to the announcement, to as low as £2 a share in early 2013. Then in July last year Green Dragon and its investors got the news they were hoping for when the State Council rebuked CUCBM and confirmed the validity of Green Dragon’s licences. It was a rare example in China of a private foreign investor winning out over a powerful state-run company. Green Dragon credits the strength of its PSC for the decision. It signed its deal at a time when the Chinese government was especially keen to bring new investors into the fledgling CBM sector and was offering far more attractive terms than those granted to companies who entered the country in subsequent years. Crucially, Green Dragon is registered in Netherlands, giving it the protection of a Dutch-Chinese bilateral investment treaty and the option of settling the dispute in international arbitration.
There are signs of rising confidence in the sector. Cnooc-controlled CUCBM and PetroChina plan to spend billions on CBM development over the next few years and smaller companies are reporting rising production and reserves. Private equity-backed AAG Energy, which is developing two CBM projects in Shanxi, has revived plans for a Hong Kong initial public offering after being forced to drop its efforts to list on the exchange in 2012. Read more: http://www.petroleum-economist.com/Article/3308663/Enter-Green-Dragon.html#ixzz2tJfuR3dS
The Chinese government would not have wanted to risk a potentially embarrassing arbitration proceeding involving a major state-run company. Especially at a time the Xi Jinping government is championing broader reforms that promise a more prominent role in the economy for private investors. The dispute had also sent a chill through the CBM sector, which unlike other areas of China’s upstream has significant foreign participation. But it was not the end of the saga. During subsequent negotiations with CUCBM, Green Dragon management learned that during the dispute CUCBM and PetroChina had drilled around 1,500 wells on Green Dragon’s acreage, most of which in the producing GSS block. “I was really taken aback when they told me how many wells had been drilled,” Mahmood Lone, the company’s chief operating officer, told Petroleum Economist. Some of the drilling was plainly visible from the road that runs through the company’s primary area of operations. But the mountainous terrain meant that large-scale development went undetected by Green Dragon personnel. During a recent drive through the area, extensive CUCBM’s development was evident. Green Dragon says that in the end the drilling could actually work in its favour. It says the State Council decision means that it has a right to a share of the revenues generated from gas sold from those wells and data collected from the drilling could lead to a major proven reserves upgrade, all without spending a dime. “Green Dragon is now set to benefit from what could have been an unwelcome invasion of its 6,620 square km licence areas,” the company said in a January press release. The company says negotiations are progressing and it hopes to conclude an agreement with CUCBM and PetroChina in the first quarter. In the meantime, it is pressing ahead with a 150-well drilling programme for 2014. Beijing is keen to get the CBM sector on course. Last year state-run China National Offshore Oil Corporation (Cnooc) took a majority stake in CUCBM, a move analysts say will bring fresh investment and much needed skills into the CBM sector. CUCBM has in the past been criticised for hindering rather than helping the sector expand. In September last year the State Council and National Energy Administration announced a raft of measures including increased subsidies, financing support for development and infrastructure as well as new tax breaks to encourage CBM development. Beijing has set a target to increase CBM output from 14.1 billion cm in 2012 to 30 billion cm by 2015 and 50 billion cm by 2020. Recent setbacks will make the 2015 target difficult to meet but the 2020 target could be achievable. A number of analysts have argued that CBM, which has already proven commercially viable, will play a far more important role in domestic production this decade than shale. There are signs of rising confidence in the sector. Cnooc-controlled CUCBM and PetroChin