Executive Interview – Green Dragon Gas

Green Dragon Gas (GDG) is arguably the leading coal bed methane (CBM) independent in China. Upstream operations are focused on six production sharing contracts (PSCs) in the east-central and south of the country. Proved and probable reserves have recently been sharply increased following a drilling programme on GDG’s properties by third parties. Reserves on the 1P and 2P definitions now stand at 300bcf and 600bcf respectively, against 59bcf and 313bcf respectively. On a 3P basis reserves are a substantial 2,600bcf, up from 2,508bcf previously. Production was running at 2.84bcf annualised in Q313 and is scheduled to exceed a 5bcf exit rate by end-2013. GDG is expecting to achieve its longstanding exit production objective of 18bcf (roughly 0.5% of China’s current gas production) by end-2014. The reserve upgrades have increased confidence in GDG’s ability to achieve these objectives.

GDG also has downstream interests based on a CNG (compressed natural gas) transportation business and a network of CNG retail stations in Henan province. At the end of June 2013 six retail stations were commissioned with a further two awaiting commissioning. The long-term plan is to establish a 31 CNG station network.