Green Dragon Gas: Estimated Reserve Volumes Up (China)

April 4, 2013

Green Dragon Gas, one of the largest independent companies involved in the production of CBM gas and the distribution and sale of wholesale gas in China, announced an increase in its estimated reserve volumes and values as at 31 December 2012, as provided by independent reserve engineers Netherland Sewell & Associates, Inc (NSAI).

Reserves Highlights:

Total Original Gas In Place of 25.2 Tcf on six blocks
Net 1P reserves increase 37% to 59 Bcf (2011: 43 Bcf) – 1P NPV 10 increase to US$ 324mn (2011: US$ 263mn)
Net 2P reserves increase 2% to 313 Bcf (2011: 307 Bcf) – 2P NPV 10 increase to US$ 1.82bn (2011: US$ 1.80bn)
Net 3P reserves decrease 0.2% to 2,508 Bcf (2011: 2,513 Bcf) – 3P NPV 10 increase to US$12.68bn (2011: US$ 12.61bn)

Randeep Grewal, Chairman and Founder of Green Dragon Gas, commented:

“The rapid increase in 1P reserves significantly de-risks the substantial reserve and resource portfolio. Our concentrated drilling program focussed on production resulting in the migration of reserves. Since 2006, we have yearly demonstrated significant migration of reserves and resources through a disciplined exploration and drilling program with tangible results. These migrations are inclusive of the off-setting produced gas volumes. We continue to demonstrate an established, effective and commercially viable method of extracting gas at a time when gas demand and prices in China are rising rapidly.

With further drilling, we see an immediate path to a further exponential growth in production to meet our annualized exit production target of 18 Bcf, which we expect to reach in 2014. To achieve this exponential growth we are in discussions with institutions on a capital raise in the form of debt through a reserve based lending facility which is the best long term source of capital available to the Company or alternatively a medium term bond. We are working hard to ensure that the cost of capital is demonstrative of the Company’s current developed reserves and niche market position.”

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LNG World News Staff, April 04, 2013; Image: Green Dragon Gas