CBM Operations Drive Sino Oil and Gas Holdings into Profit Zone

Driven by coal bed methane operations, Sino Oil and Gas Holdings Limited on Monday reported half yearly net profit of HK$5.905 million ($0.79 million) compared with net loss of HK$24.495 million ($3.16 million) during same period last year. 

Revenue from CBM operations jumped 111 percent to HK$38.632 million ($4.98 million).

Through its wholly-owned subsidiary Orion Energy International, Sino Oil and Gas entered into a production sharing contract with China National Petroleum Corporation (CNPC) for exploration, exploitation and production at a CBM field in the Sanjiao block located in the Erdos Basin in Shanxi and Shaanxi provinces of China. The company has a 70% interest in the PSC.

Earlier this month, Orion was notified by PetroChina that the report on environmental effects from Sanjiao CBM project was approved by Shanxi Provincial Department of Environmental Protection on 28 July 2014.

At the end of the second quarter of 2014, the Sanjiao CBM project has completed a total of 73 wells, comprising 40 multi-lateral horizontal wells and 33 vertical wells. Out of the total 73 wells, 59 wells were in the normal dewatering stage, of which 49 wells had access to the gas collection pipeline network.

During the period, the Sanjiao project recorded CBM production of 22.93 million cubic meters versus 20.24 million cubic meters in the same period last year.

CBM sales during the period stood at 20.53 million cubic meters compared with 12.48 million cubic meters in the corresponding period last year, the company said.

The average gas sale-to-production rate thus increased to 89.5% from 61.7% witnessed in the same period last year.

In terms of the composition of gas sales during the period, industrial piped and residential piped CBM sales accounted for 89.7% (2013 interim: 79.7%) and 10.1% (2013 interim: 10.9%) of total sales respectively. Total piped CBM sales contributed 99.8% (2013 interim: 90.6%) of total gas sales during the period.