Fortune Oil announced its Interim Management Statement for the period from 30 June to date.
Highlights
OPERATIONAL OVERVIEW
Natural Gas Operations
The growth of the natural gas business is still strong with new natural gas supply connections increased by 89 per cent to 21,557 in the third quarter (Q3 2011: 11,427).
Natural gas sales volumes were 112 million cubic meters in the third quarter as a result of the disposal of a throughput pipeline as part of the transactions to establish the Shijiazhuang joint venture.
The Company has made significant progress on the new natural gas projects announced over the past 18 months and is on track to deliver its growth strategy:
Yangtze River Vessel – LNG Ship refuelling
Fortune Oil has obtained the first approval of its type in China for its LNG dual fuel ship following the successful completion of the river shipping trials and submission of documentation to the Maritime Safety Administration. The license obtained for the first ship is the key step to enable the commercial deployment of LNG dual fuel ships.
Fortune Oil is progressing the engineering design for the first two LNG refuelling stations along the Yangtze River which will enter operation in 2013 and 2014.
Fortune Oil has received regulatory approval for the LNG pier and LNG receiving terminal for the Chongqing LNG refuelling station which is now under construction. The current plan is to build seven LNG stations along the Yangtze River over the next few years.
Liulin CBM Operations
There continues to be significant progress made at the Liulin CBM block which is on track for first gas sales in 2013. The project is now in the final stages of appraisal with production testing in progress on various vertical and multi-lateral wells drilled by Fortune Liulin Gas (FLG) and China United Coal Bed Methane Corporation (CUCBM) and commercial gas flow rates have been achieved. FLG is preparing the overall development plan and will seek relevant government approvals to enable full – scale development of the Liulin block together with CUCBM starting in 2013.
Financial Position
As at 19 November, the Group had a cash balance of £ 77 million. As a result of this, together with the continuous cash inflow from operations, the Board of Fortune Oil envisages no difficulties in meeting both current loan repayment obligations and the Company’s investment commitments.
Outlook
Overall business performance is in line with the Board’s expectations. The Board remains optimistic with regard to Fortune Oil’s prospects in view of the current economic backdrop, the Company’s financial strength and market potential.
[mappress] LNG World News Staff, November 20, 2012