EQS-News / 21/01/2016 / 12:43 UTC+8
For Immediate Release
Sino Oil and Gas Holdings Limited
Entered to Strategic Cooperation Framework Agreement with Lanhua Baoxin to jointly expand the CBM market
Hong Kong, 20 January 2016 -Leading oil and gas explorer and developer Sino Oil and Gas Holdings Limited (the "Company", Hong Kong stock code: 702) is pleased to announce that on 19 January 2016, the Company entered into a non-legally binding Strategic Cooperation Framework Agreement ("Framework Agreement") with Shanxi Guxian Lanhua Baoxin Coal Company Limited (山西古縣蘭花寶欣煤業有限公司) ("Lanhua Baoxin"), pursuant to which the Company and Lanhua Baoxin, intend to establish a project management team for the development of coalbed methane ("CBM") project located in the coal mine block of Lanhua Baoxin (the "Project"). Based on preliminary analysis, the Company will conduct technical plan design and assessment of the economic benefits in respect of the CBM development project in order to secure the CBM production sharing contract of the block.
The Company's Sanjiao CBM project in Shanxi Province is located in the eastern edge the Ordos Basin with good infrastructure and mature business model. Through signing the Framework agreement with Lanhua Baoxin located in Qinshui basin, the Company's project already covered the two richest CBM regions in China which effectively increased the market share. At the same time, through in-depth cooperation with the local large-scale coal enterprises, the Company is also actively seeking to diversify the business model and cooperation projects, continuously to improve the CBM development business model and inject new momentum for the Company's growth.
Lanhua Baoxin as a member of the Group of Shanxi Lanhua Technology Venture Co., Ltd (山西蘭花科技創業股份有限公司) is located in Beiping Town, Gu County of Linfen City, Shanxi Province, PRC and owns the coal mine located at the heart of Qinshui coalfield, with a designed production capacity of 900,000 tons per year. The coalfield covers an area of approximately 6 square kilometers with approximately 30.61 million tons of recoverable reserves. As the mine has high gas content, in order to ensure the safety of the mine and proper extract of the CBM, Lanhua Baoxin entered into the Framework Agreement and will fully leverage, among others, its geographical advantages and the long-established amicable cooperation relationship with government bodies to proactively promote the Project. Lanhua Baoxin will work with the Company's project management team to organize and implement project development plans, and works on land expropriation, obtaining construction approval and license registration.
With effect from the date of Framework Agreement, the Company and Lanhua Baoxin will work in collaboration to promote the cooperation of the Project and will conduct further negotiation on aspects not covered by the Framework Agreement so as to conclude a concrete contract.
The Company believes that the investment in the Project is in line with the Company's positioning and development strategy in unconventional natural gas and the Project holds the potential to obtain attractive return on investment with controllable risks, which is in the interest of the Company and its shareholders as a whole.
For further enquiries, please contact:
Celia Li
Corporate Communications Department
Phone：(852) 2802 3623
Email：celiali@sino-oilgas.hk
About Sino Oil and Gas Holdings
Sino Oil and Gas Holdings Limited is a leading oil and gas developer and explorer. The Group is principally engaged in natural gas and oil exploration and extraction with a focus on unconventional gas -- Coal Bed Methane ("CBM"). Sanjiao CBM project is the Group's core business and the Group will conditionally and strategically extends its business to midstream and downstream. On this basis, the Group will balance the development of its gas and oil business portfolio, strengthen the overseas business plan and seek for merge and acquisition opportunities of high-quality oil and gas resources globally.
For more information, please visit http://www.sino-oilgas.hk/ .
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End of Press Release