Sino Gas & Energy 45% increase in Expected Monetary valuation to US$2.3b

[Sparty]

The successful year of drilling and seismic operations in 2013, enabled RISC to attribute over 1 trillion cubic feet (tcf) of mid- case 2P (Proven and Probable) Reserves to the project, with Sino Gas' share at 291 billion cubic feet (bcf) (announced 4 March 2014)1. The continuing upgrading and expansion of the reserves and resources base resulted in a 45% increase in RISC's independent economic valuation of the Company's share of the project's Expected Monetary Value (EMV) from US$1.6 to US$2.3 billion.

After careful analysis and optimisation of stimulations treatments, significant flow rates were recorded from the first horizontal well on Linxing (West). In addition, a further significant flow rate was recorded from an unfracced lower zone of TB-26 in the prospective area on the same PSC. To date, RISC's economic evaluation has been modelled based on a development case employing 100% vertical wells, and this result provides confirmation that the use of horizontal well technology can potentially have a positive impact on project economics. A total of 18 wells were fracced, and encouraging production rates recorded, including a number of wells which flowed at multiple times the minimum commercial rate from single zone tests. In addition, long term flow testing of two wells over two months in the discovered area of Sanjiaobei produced parameters for CRR compilation in line with expectations.

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