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Sino Gas Updates Ops on TB-07 Gas Discovery, China

Source: www.gulfoilandgas.com 5/31/2010, Location: Asia

Sino Gas & Energy Holdings Limited is pleased to announce a significant update to the current flow-testing program, mobilized on 12 May 2010.

This activity is the first step in a multi well / multi fracture program designed to generate the data required to confirm gas reserves as a critical step towards preparation of a full field development plan for Tuban.

The first well being tested is the TB-07 gas discovery well drilled during Q4, 2009.

The test was conducted on a zone which exhibited promising log and core testing results.

On 26 May 2010, CCDC Downhole Technical & Operations Company (CCDC) perforated a 6-meter thick zone using tubing conveyed perforating guns on 2 7/8” tubing.

The well was flow tested for 24 hours at three different choke sizes and was then ‘shut in’ for pressure build up evaluation. At a choke size of 24/64” (approx 0.9cm), the well flowed dry gas at a stable rate of approximately 1,836,000 scf/day (1.836 MMscf/day or 52,000 m3/day) for 6 hours with a tubing head pressure of 600 psi.

Sino Gas Managing Director Stephen Lyons said that the Company was extremely pleased with the initial flow test on TB-07.

“Sino Gas’s previous best well flowed at 400,000 scf/day with tubing head pressure of 200 psi following fracture stimulation. To have achieved an initial flow rate, before fracture stimulation, in excess of 4 times this rate is an excellent start to our program. Sino Gas’s target during 2010 is to upgrade our resources to reserves and move towards development, and this result should contribute strongly to that objective,” said Mr Lyons.

As per the work program for the flow test, Sino Gas has now ‘shut in’ the well for a further period to determine whether it is necessary to hydraulically fracture stimulate the well.

Sino Gas’s expected forward work program
As previously announced, Sino Gas expects to implement the following work program during 2010 to generate the data to proceed to confirm the gas reserves in Tuban as a critical step towards preparation of a full field development for the Tuban project.

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