G3 Exploration Regulatory News (G3E)

18 Sep 2006 07:01

Green Dragon Gas Ltd18 September 2006 GREEN DRAGON GAS LTD. ("Green Dragon" or the "Company") GREEN DRAGON SIGNS DRILLING CONTRACTS Green Dragon Gas Ltd. (AIM:GDG), the Chinese Coal Bed Methane ("CBM") businesswhich successfully listed in August to become the largest Chinese company onAIM, today announces an update on the development of several of its Chineseblocks. The Company executed an agreement with PetroChina Planning & Engineering Ltd("CPPEI"), a wholly owned subsidiary of PetroChina (0857.HK/PTR.N), to concludethe Company's Shizhuang South Block Overall Development Program ("ODP"). CPPEIhas extensive expertise on surface facilities including pipelines, storage andtransport and primarily executes such tasks for most of PetroChina'sdevelopments. This ODP is due to be submitted to the relevant authorities in Beijing laterthis year and earmarked to be China's first CBM ODP with a foreign party. UponODP approval, the block is expected to enter development and commerciality. TheODP will focus on developing the area and gas resources around the Company'scurrent successful pilot program in Zaoyuan, Shanxi. The Company also announced the signing of drilling contracts with Shandong CoalGeology Bureau ("SCGB") and Henan Yuzhong Geological Prospecting Engineering("HYGP") to drill vertical wells in four of the Company's five blocks - SCGB todrill Shizhuang South and Panxie, and HYGP to drill Shizhuang North and Qinyuan.The drilling contract signing and awards, held in Beijing last Friday, werepresided over by the management teams from the Company and partners China UnitedCoal Bed Methane ("CUCBM"). Mr. Randeep S. Grewal, Green Dragon's Chairman and CEO commented "I am verypleased with our team's wide scale execution on each of the blocks. As adeveloper of a large gas resource in five blocks, we expect to have drillingoperations in each block accomplishing our objectives for this year. Thedrilling of these pilot wells is to provide us with relevant subsurface data todesign the development plans into next year. "The inclusion of PetroChina's Planning and Engineering subsidiary into our ODPis an important milestone structurally for our blocks and the CBM industry atlarge. Facility and pipeline designs for CBM commercial production are a littledifferent than natural gas so I am pleased to have China's most experienced teamworking on our behalf to further ensure a successful development period in theyears to come. This ODP will establish the model to be used for our other blocksover the next two years and its approval by the authorities marks the beginningof a commercial development for a block. "The continued focus on gas supply by the upstream producers and importantly thedownstream citigas distributors, eagerly looking for incremental supply, hasfueled much needed adrenaline into the industry. CBM is clearly poised to be thelogical alternative gas resource with Green Dragon at the forefront of itscommercial production. We look forward to working with our partners CUCBM andthe rest of the industry in developing this critical onshore resource." The Company is presenting at the UBS Alternative Energy Conference today inHongKong to institutional investors and at the China Coal Academy conference inQingdao on 20th September, 2006 to the industry at large on CBM developement. For further information on the Company and its activities, please refer to thewebsite at www.greendragongas.com or contact: Randeep GrewalChairman and Chief Executive, Green Dragon Gas Ltd.+852 2166 8686 Tim Thompson/ Mark Edwards/ Nick MelsonBuchanan Communications0207 466 5000 Dr Azhic Basirov/ David JonesSmith & Williamson Corporate Finance Limited020 7131 4000 18 September 2006 This information is provided by RNS The company news service from the London Stock Exchange