In this connection, GDG has inked a memorandum of understanding (MoU) on five production sharing contracts (PSC) and a couple of supplementary agreements with CNOOC’s subsidiary China United Coalbed Methane Corporation (CUCBM) for Shizhuang South (GSS) and Shizhuang North (GSN) Blocks.
CUCBM will invest $475.03m while GDG will inject $229.58m in the development of the assets.
Green Dragon Gas founder & chairman Randeep S. Grewal said: “This material milestone concludes eight years of discussions and commences a committed close cooperation between the parties to unlock the lucrative monetisation of the GSS and GSN Blocks.
“The joint cooperation will now fully focus on gas sales and achieving returns from the combined investment made by CUCBM and GDG. It will be the first time in eight years that the parties can focus on gas sales in the field rather than the administration of the PSC's.”
The parties agreed that the agreements will resolve any uncertainty associated with the drilling on the GSN and GSN blocks. GDG has stakes in 188 wells on the GSN Block and the 1,139 wells on the GSS Block drilled by CUCBM.
In the GSS Block, GDG will get back to a stake of 70% interest it previously held in all 1,139 carried wells. Concurrently, it will retain its stake and operatorship in the 200 non-carried wells.
Green Dragon Gas is a London-listed independent gas producer having operations in China. It is mainly engaged in the production and sale of coal bed methane (CBM) gas and holds six production sharing agreements in the country.
