Independent engineers Netherland, Sewell & Associates Inc (NSAI) confirmed a 22% increase in 2P reserves (proved plus probable) to 382 billion cubic feet of gas (Bcf), with a net present value (NPV) of US$2.8bn (£1.7bn).
The unconventional gas specialist also enjoyed a 113% increase in 1P reserves (proved), up to 126 Bcf, with an NPV of US$898mln (£532mln).
It also saw a slight decline in 3P reserves (proved plus probable plus possible reserves) to 2,382 Bcf, valued at US$16.1bn (£9.5bn), a valuation increase of 27%.
The latest figures, which confirm total original gas in place of 25.2 trillion cubic feet across six blocks, include the 1,300 wells drilled by the company’s partners.
The update did not however include wells not already in production by the end of 2013, leaving plenty more room for upside.
The unconventional gas group estimates its total reserves to be 300 Bcf in 1P and 600 Bcf in 2P. It expects to hit these numbers once the required infrastructure is built over the next 15 months.
Partner CUCBM plans to spend up to US$250mln (£148mln) to this end. This is expected to lift 2P reserves towards the 600 Bcf figure, valuing the gas under the ground at as much as US$4.4bn (£2.6bn), compared with the company’s current market capitalisation of £733mln.
Green Dragon’s founder and chairman Randeep Grewal said: “The company is going through a transformational growth trajectory and this reserve audit values the paradigm shift at a static point, 31 December, 2013.
“With an equity interest in over 1800 wells which are in varying stages of commerciality, the reserve migration towards 1P will continue.”
He added: “The material transactions with CNOOC, CUCBM, PetroChina, CNPC and resulting beneficial economic benefits to Green Dragon from over US$1 billion of deployed capex have been included by the independent reserve engineers when concluding the net present values in this audit of the forecasted revenues.”
The shares traded flat at 537.5p.