G3 Exploration Regulatory News (G3E)

30 Aug 2007 07:01

Green Dragon Gas Ltd30 August 2007 30 August 2007 GREEN DRAGON GAS LTD. ("Green Dragon" or the "Company") GREEN DRAGON COMMENCES 80 WELL DRILLING PROGRAMME Green Dragon Gas Ltd (AIM: GDG), the Chinese coal bed methane ("CBM") business,today announces that its 2007 drilling programme is well underway and targetedto be concluded by the Chinese New Year in mid-February 2008. 80 wells are to bedrilled across the five blocks to complement the 47 wells successfully drilledin 2006. The exact number of wells within each block could be modified duringthe drilling period. BLOCK WELLS DRILLED TOTAL WELLS 2007 DRILLING 2006 DRILLED PROGRAMME SPUD DATE TO END 2006SHIZHUANG S 26 41 33 30 July SHIZHUANG N 4 4 8 3 September QINYUAN 6 6 15 6 September FENGCHENG 6 8 17 2 August PANXIE EAST 5 7 7 15 September TOTAL WELLS 47 66 80 The wells are expected to be drilled by twelve drilling contractors utilisingtwenty-two drilling rigs. The target coal seams are identical to those drilledin 2006 and this year's drilling programme further extends the pilots drilledlast year in essentially the same area within the blocks. In addition to the 80 wells being drilled by the Company, China United Coal BedMethane Corporation Limited ("CUCBM") has drilled 51 wells on the Chengzhuangsection of the Shizhuang Block under a farm-out agreement entered into by theCompany last year. These wells are expected to be fracture stimulated next yearconcurrent with the related infrastructure being brought online. The Overall Development Programme ("ODP") for Green Dragon's most advancedblock, Shizhuang South, has been submitted to NDRC. This first ODP, compiled bythe Company, CUCBM and CPPEI (a PetroChina subsidiary), upon approval, willallow the Company's partners to obtain authorisation to pay for their 40%working interest of development expenses and furthermore confirm thecommerciality of the block. Cumulative gas production from pilot wells locatedon this block has exceeded 5,550,000 cubic meters demonstratingthe gas production potential from the related coal seams. The Company's Chairman and CEO, Mr. Randeep S. Grewal, commented, "The growth continues on plan and in accordance with our strategy. The Companyis well funded for its 2007 drilling plan and related infrastructure. The wellsdrilled last year in Shizhuang South and North, Qinyuan and Fengcheng have beensystematically completed and put on production during the last quarter asplanned. De-watering of the coals has been initiated and the early results havebeen productive in enhancing our 2007 drilling programme. This year's drillingwill provide the technical conclusions for a continuous drilling programme forthe next ten years and hence, this is an important decision making year for theCompany. We are currently producing gas from wells that have been in productionfor the last eight years and we aim to have similar consistent gas supply inorder to build a reliable distribution network across all our blocks as wecontinue to become an integrated gas supplier." For further information on the Company and its activities, please refer to thewebsite at www.greendragongas.com or contact: Randeep S. Grewal Tim Thompson / Nick MelsonBetty Cheung Investor RelationsGreen Dragon Gas Buchanan Communications+852 3710 0168 +44 20 7466 5000 Dr Azhic Basirov / David JonesNominated Adviser & BrokerSmith & Williamson Corporate Finance Limited+44 20 7131 4000 This information is provided by RNS The company news service from the London Stock Exchange