Sino Gas Encounters Gas Shows At TB-07 Well In Shanxi Province, Onshore China

Published: 16-Nov-2009

Sino Gas & Energy Holdings Limited (Sino Gas) said that drilling is currently proceeding as planned and on November 16, 2009, the TB-07 well has reached a depth of 2,139 meters. Target depth (TD) is 2,200 meters. Currently the well is on prognosis and to date has encountered all geological formations as predicted. Gas shows have been seen in these formations and also in the adjacent coal sequences.

Once target depth is achieved the well will be logged with electric wire-line logging tools to locate and quantify potential hydrocarbon bearing zones. Depending on the logging results the well will then be cased and suspended for future fracture stimulation to confirm gas rates.

TB-07 Well is located in the company’s Linxing production sharing contract located in Shanxi province.

The TB-07 well has been designed to appraise the key Taiyuan/Benxi and He-8 gas reservoirs.

It is Sino Gas’ objective to identify a “high graded” area of approximately 50 square kilometers on a geological trend within its key Tuban discovered area and as part of moving towards development, upgrade its contingent resources to reserves.

The TB-07 well is designed to facilitate these objectives as it is located in close proximity to other wells that have been drilled and flow tested:

-- TB-02 well is 2.7 kilometres south of TB-07 and has previously flow tested gas at a combined rate of 400,000 scf/day from the Taiyuan/Benxi and He8 reservoir intervals;

-- TB-01 well is six kilometers north of TB-07 and has flow tested gas at the combined rate of 180,000 scf/day from the Taiyuan, He8 and Shiqianfeng reservoirs.