Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

UPDATE - Green Dragon Gas more than doubles proven reserves

Green Dragon Gas has seen the value of its 2P reserves rise by US$1bn after an update at its coal bed methane licences in China.


Green Dragon Gas (LON:GDG) has seen the value of its 2P reserves rise by US$1bn after an update at its coal bed methane (CBM) licences in China.

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.

View full G3E profile View Profile

G3 Exploration Ltd Timeline

Related Articles

Gas valves
April 20 2018
The oil and gas producer said it believes the additional work will allow access to twice as many “pay zones” as well as shortening the time-frame to commercial gas production
September 19 2018
Permex has assets across West Texas and southeast New Mexico..
oil and gas operations
July 17 2018
With its third major transaction set to complete soon, the US-focussed oil and gas firm is continuing its transformation

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use