China Focused CBM Explorer Green Dragon Gas Reports 6% Rise in 2015 Revenue
Green Dragon Gas, one of the largest independent companies involved in the production and sale of CBM gas in China, has reported 2015 revenue of $37.7 million, a 6 percent increase year on year.
The company also delivered its maiden profit last year of $82,000.
"The Group has succeeded in its transition from an explorer and CBM technology developer into a commercial gas producing, profitable company, delivering our maiden profit in 2015,” Randeep S. Grewal, Founder and Chairman of Green Dragon Gas said Wednesday.
Upstream
The company saw its exit-rate production capacity increase by 36 percent to 12.12 bcf per annum providing the basis for future gas sales as infrastructure is built out particularly on the Shizhuang South (GSS) block. During the year Green Dragon’s partner, CNOOC, completed and commissioned two further gathering stations bringing processing capacity in GSS to 22.7 bcf per annum as part of the programme to increase the total processing capacity in the block to 53.4 bcf per annum in the next 18-24 months.
The year 2015 was marked by tenth consecutive increase in both 1P and 2P reserves with net 1P reserves increasing by 17 percent to 173 bcf and net 2P reserves up 29 percent to 549 bcf. The year saw the initial booking of 1P and 2P reserve volumes on Shizhuang North (GSN) block, reflecting the delivery by CNOOC on its investment commitment made as part of the framework agreement entered in 2014.
Company’s exploration focus in 2015 has largely been on the GGZ block in Guizhou province where it drilled and successfully completed six exploration wells during the year. Two of the six wells are currently producing gas and three are showing casing pressure consistent with gas desorption.
Green Dragon Gas will now move toward certified reserves in 2016 as the first step toward developing an Overall Development Programme for this block.
Outlook
Given the strong margins historically for CBM in China and the increased Chinese government support through subsidy, Grewal expects margins to remain robust for CBM production even if medium term price pressure comes to bear. The net margins within the natural gas sector are certainly the best globally in China CBM and the company is uniquely structured to avail this opportunity.
"With production capacity growth of 33 percent and strengthened cooperative partnerships with CNPC, Petrochina and CNOOC, we are proud of the position we find ourselves in. As our focus moves to optimising production, revenue and profitability on GCZ and GSS we move into a position where we can now consider how we best deliver tangible value to our shareholders whilst still retaining the financial resources necessary to develop all of GDG's blocks," Grewal said.