AAG Energy Achieves CBM Production Milestone in China
AAG Energy Holdings Limited on Tuesday said it has achieved new production milestones at both the Panzhuang and Mabi CBM concessions in China.
CBM production from the Panzhuang concession has exceeded 1.5 million cubic meters per day, which according to the company is an industry-leading achievement. The Panzhuang concession is the most developed CBM concession in China, and remains the first Sino-foreign CBM cooperative project to have obtained overall development plan (ODP) approval from the NDRC, and the first to have reached designed production capacity for CBM commercialization.
The company has also managed reduce capital expenditure. Compared with 2014 and 2015, the current capital expenditure per well at its Panzhuang concession has come down by 29 percent and 13.9 percent respectively, AAG said. Drilling speed has also improved by 34 percent year-on-year.
At the Mabi CBM concession, the gross gas flow rate from the pilot wells has exceeded 100,000 m3 per day, an increase of 300 percent over the January 2016 average daily production. This production milestone is supported by a significantly improved individual well performance at Mabi, the company said. Capital expenditures per well at Mabi CBM concession decreased by 16.3 percent and 13.9 percent when compared to 2014 and 2015, respectively.
The area of the Mabi concession is much larger than that of AAG Energy's operated and commercialized Panzhuang concession, covering 898.2 km2 under the Mabi PSC in partnership with China National Petroleum Corporation (CNPC).
"This continued ramp-up in production should enable Panzhuang to soon exceed its ODP-designed annual commercial capacity of 500 million m3, marking yet another significant milestone as well as demonstrating its leading role in China's CBM development,” said Carl Lakey, Co-CEO and COO of AAG Energy.
Panzhuang and Mabi concessions, are located in the southern Qinshui Basin, which contains the largest amount of proven CBM geological reserves in China.