Proactive Investors - Run By Investors For Investors

G3 Exploration advances assets ahead of spin-off of China CBM production arm

"Our annual independent updated reserves report reinforces the potential of our quality and well positioned asset base in China,” said chairman Randeep Grewal
gas
The GGZ block is expected to produce first gas this year

G3 Exploration Ltd (LON:G3E) said it will push ahead with plans to spin-off its Chinese coal bed methane (CBM) business as it reported strong progress at its exploration and production assets.  

The company announced in December that it will separate its main producing assets – blocks GSS and GCZ in the southern Qinshui Basin, Shanxi Province, China – into a new Hong Kong listed business to be called Green Dragon Gas (GDG).

READ: Green Dragon Gas to split, production business set to IPO in Hong Kong

The remaining development and exploration blocks, including GGZ, GSN, GQY A & B, GFC and GPX, will stay in G3E and remain listed in London.

G3E will also maintain a direct shareholding of up to 25% in Green Dragon following the split and initial public offering on the Hong Kong Stock Exchange.

In the group’s annual independent updated reserves report, the company said it had total net proved 1P reserves of 96.7 billion cubic feet of natural gas (bcf) valued at US$474mln.

Total net proved and probable 2P reserves stood at 377.1 Bcf valued at US$2.42bn while 3P reserves were 2044.4 bcf worth US$12.75bn.

China assets well-positioned, says chairman

"Our annual independent updated reserves report reinforces the potential of our quality and well positioned asset base in China,” said Randeep Grewal, chairman and founder.

Grewal added that the GGZ block in the Guizhou Province of China is “progressing well” towards development with first gas anticipated this year, as planned.

Last year the group successfully completed 12 coal bed methane gas production wells in multiple CBM gas reservoirs and has seen “continuous and stable” pilot commercial output from seven CBM wells.

It also finalised an initial pilot gas sales programme for current gas producing wells.

“Once in production, the GGZ Block will be the next asset to be ring-fenced for sale, farm-out or a dividend in specie, as per producing blocks, GSS and GCZ, which are presently planned to be included in the Hong Kong IPO of GDG,” he said.

"Our continued primary focus is to explore and develop our remaining exploration blocks and dis-risk the development profile across our vast acreage with our partners CNOOC, CUCBM, CNPC and PetroChina."

View full G3E profile View Profile

G3 Exploration Ltd Timeline

Related Articles

oil and gas operations
December 03 2018
The acquisitive oiler has told investors that financial results for 2018 will be ahead of previous expectations
oil rig
October 25 2018
Analyst Bill Newman says the investment thesis remains intact and keeps a C$1.10 target price on the stock
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

© 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