Two of the wells within 3/4/5 seam have been successfully dewatered and are collectively producing gas at the rate of 18,689 cubic meters per day (660,000 cubic feet per day).
Both of these wells are commercially viable at this production rate with the expectation that flow levels can materially increase as the wells are further optimized.
In addition, there is an additional well in the 3/4/5 seam and a single well in the 8/9 seam that remain in the dewatering phase.
An initial gas sales agreement (GSA) in relation to Liulin gas was recently signed.
FLG, which has a 50% equity stake in the project, and its partner China United Coal Bed Methane (CUCBM) who hold the remaining 50%, are in the process of securing additional GSAs.
As a result of the encouraging technical and commercial progress on Liulin, Dart Energy (Dart) has exercised its option to increase its equity stake in FLG to 45% for $8.7m payable in two equal tranches – upon exercise and the 2nd tranche is payable on or before 30 March 2011.
Fortune Oil will hold the remaining 55% in FLG.
