2018 Operational Update and 2019 Outlook

RNS Number : 4208O
G3 Exploration Limited
30 January 2019
 

30th January 2019

 

G3 EXPLORATION LTD.

("G3 Exploration", "G3E" or the "Company") 

 

2018 Operational Update and 2019 Outlook

 

G3 Exploration Ltd. (LSE: G3E), an independent specialist in the exploration and development of coal bed methane gas (CBM) with roots in China and a focus on international expansion, is pleased to provide an operational update for the year ended 31 December 2018, as well as an outlook for the year 2019.

 

OPERATIONAL HIGHLIGHTS

 

G3 Exploration (G3E) - Exploration and Appraisal activities

 

Guizhou block exploration program advanced with Chinese reserve report successfully submitted.

Jiangxi and Anhui exploration blocks' development potential re-assessed with high exploration acreage identified.

12 wells placed online in Shizhuang North block.

400 sq km of 2D Seismic added with an additional 14 wells drilled in Qinyuan block for a total of 69 wells drilled.

Total invested capital of $ 240 million across six exploration blocks with 349 drilled wells and ,660 sq km of Seismic.

Exploration portfolio of 23.5 TCF of Gas in Place discovered.

 

 Green Dragon Gas (GDG) - Production and Development activities

 

Year-end exit production rates of:

Chenghuang (GCZ) Block - 2.05 BCF

Shizhuang South (GSS) Block Operated - 4.17 BCF

Shizhuang South (GSS) Block Joint Operated - 2.61 BCF

 

Year-end exit sales rates of:

Chenghuang (GCZ) Block - 1.95 BCF

Shizhuang South (GSS) Block Operated - 2.19 BCF

Shizhuang South (GSS) Block Joint Operated - 2.25 BCF

 

NDRC approved GCZ ODP plan for drilling of 147 wells, invested capital of c. $55 million with annual peak production target of 6.35 BCF. Plan to be commenced in Q1 2019 and completed by 2020 year-end.

GSS joint-operated Infrastructure construction ahead of schedule by CNOOC team. 950 wells of total 1328 wells connected to sales infrastructure.

GSS gross sales volume of 3.4 BCF, an increase of 18% over 2017.

 

2019 OUTLOOK

 

Progress High Impact Exploration - Focused Development Program - Dividend GDG

 

G3 Exploration

  

·     First gas in Guizhou Block.

·     Certify Chinese Reserve Report in Guizhou and file Overall Development Plan.

·     Conclude prospective exploration acreage across all six blocks.

·     Receipt of GDG Dividend.

·     Expand into additional geography.

 

Green Dragon Gas

 

·     Increase gas sales to monetize invested capital.

·     Drill infill wells to compound sale volumes.

·     Commence GCZ ODP to drill 147 wells through yearend 2020.

 

 

Mr. Randeep S. Grewal, Executive Chairman, commented:

"I am pleased to report continued operational progress across our two producing commercial blocks in Shanxi as well as our six exploration blocks in Anhui, Guizhou, Jiangxi and Shanxi.

 

"Most notable is the progress being made in the GSS commercial producing block. Indeed, this focus has seen gross gas sales increase to 3.4 BCFPY, an 18% increase over 2017. The exit gas sales rate was 12.2 MCFPD, a 49% increase over 2017. Of the 1328 wells drilled to date, 1028 - or 93% have been connected to the newly built pipeline infrastructure while 460 of the wells are already contributing to gas sales. We now have 950 - or 72% - connected to a pipeline network spanning 677 km across the 388 sq km gas block with three operational gas gathering compressor stations.

 

"On the GCZ block, the ODP plan previously approved by CNPC received final NDRC approval in September 2018. This ODP commits the drilling of 147 wells by year-end 2020, with drilling anticipated to start in Q1 2019. The expected gas production following this ODP execution forecasts production in GCZ to be increased to 6.35 BCFPY, a 165% increase over current.

 

"In addition to our CNOOC & CNPC cooperative partnership on the two producing blocks, we continued to progress our PetroChina partnership in the Guizhou (GGZ) exploration block. The team is focused on concluding the production and completion plan to commence test gas sales in this year so as to progress the asset into development.

 

"The exploration team has made significant progress during the year in concluding their focused area for further development. We expect this focused exploration programs across all six blocks to be concluding specific development prospects.

"To conclude the GDG dividend optimally, the Company has engaged Citigroup and Credit Suisse to present strategic options to the G3E Board with regard to the producing assets and exploring possible monetization alternatives. In accordance with our stated business plan, we continue our focus on exploration and development activities."

 

 

For further information on the Company and its activities, please refer to the website at www.g3-ex.com or contact:

 

FTI Consulting

 

Ben Brewton / Genevieve Ryan / Tom Pigott

Tel: +44 20 3727 1000

 

About G3 Exploration Ltd.

 

G3E is a leading independent gas producer with operations in China and is listed on the main market of the London Stock Exchange (LSE: G3E). The Company has 377 Bcf of 2P reserves and 2,044 BCF of 3P reserves across eight production blocks covering over 7,566km² of license area in the Shanxi, Jiangxi, Anhui and Guizhou provinces. It holds six Production Sharing Agreements with strong, highly capitalised Chinese partners including CNOOC, CNPC and PetroChina, and has infrastructure in place to support multiple routes to monetise gas production.

 

The company is committed to an exploration and appraisal focused business plan in coal bed methane development across three geographies concurrently. It has a well-established track record and has demonstrated perseverance in going the distance to monetise shareholder value through three basic principles:

 

·     Focus on core intellectual aptitude in developing coal bed methane

·     Develop assets in an environmentally and socially prudent manner

·     Protect accreted shareholder value

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
UPDEAFFNAFXNEFF
UK 100

Latest directors dealings