Dow Jones received a payment from EQS/DGAP to publish this press release.
EQS-News / 25/08/2017 / 23:42 UTC+8
For Immediate Release
*Sino Oil and Gas Holdings Limited*
*Turnover Increased by 300% in the First Half of 2017*
*Business Overview
Hong Kong, 25 August 2017 -* Leading oil and gas explorer and developer Sino
Oil and Gas Holdings Limited (the "Company", Hong Kong stock code:702) today
announced the unaudited interim results of the Company and its subsidiaries
(collectively the "Group") for the six months ended 30 June 2017. During the
period, the Group recorded a turnover of approximately HK$310,649,000 (2016
interim: HK$78,381,000), which has substantially increased by nearly 3 times
as compared with that of the same period in last year. The turnover included
the sales of Sanjiao Coalbed Methane ("CBM") Project of approximately
HK$37,769,000(2016 interim: HK$30,435,000), and the sales derived from raw
coal washing project located in Qinshui Basin, Shanxi Province of
approximately HK$272,000,000(2016 interim: HK$43,947,000). During the
period, the Group recorded a net loss of approximately HK$67,568,000 (2016
interim: net profit HK$5,697,000). It was mainly attributable to the
increase in the finance costs incurred arising from the convertible notes
and borrowings during the period.
During the period, the Group recorded earnings before interest, taxes,
depreciation and amortization ("EBITDA") of approximately HK$104,480,000
(2016 interim:EBITDA HK$52,293,000) which included other gains from fair
value changes of approximately HK$61,444,000 (2016 interim: nil).
During the period, the operation of Sanjiao CBM Project has improved and CBM
sales has increased by approximately24% as compared with the same period of
last year. In the first half of 2017, the Group actively expanded its sales
channels of CBM, thereby, the gas sale-to-production rate has increased to
approximately 90% (2016 interim: 81.6%). At the same time, government
subsidy of approximately HK$11,880,000 (2016 interim: HK$9,592,000) for
sales of CBM for the year 2016 has been received and recorded as "other
revenue" during the period. The Group believes that with the concerted
efforts of the team, Sanjiao CBM Project will generate long-term and
substantial returns.
*Sanjiao CBM Project*
As at 30 June 2017, the Sanjiao CBM Project has completed a total of 116
wells, comprising 64 multilateral horizontal wells and 52 vertical wells.
Out of the total 116 wells, 82 wells were in the normal dewatering and gas
producing stage, of which 84wells had accessed to a gas collection pipeline
network. A ground pipeline network of approximately 18 kilometers,
inter-well pipelines of approximately 56 kilometers, and outbound pipelines
of approximately 17 kilometers were completed. Approximately total
68.7kilometers of 10KV power grid and branch power line were also completed.
During the period, the Group has completed the expansion of the CBM
processing station. As at 30 June 2017, its total daily CBM processing
capacity has reached 500,000 cubic meters, and the Group will continue to
expand the coalbed methane processing capacity in due course so as to cope
with the increasing production capacity of Sanjiao CBM Project.
During the period, Sanjiao CBM Project recorded EBITDA of approximately
HK$40,055,000 (2016 interim: HK$28,992,000), which has increased by 38% as
compared with the same period of last year. During the period, the
production and sales of CBM were approximately 37.9 million cubic meters
(2016 interim: 32.49 million cubic meters) and 34.17million cubic meters
(2016 interim: 26.52 million cubic meters) respectively, resulting in a gas
sale-to-production rate of approximately 90% for the period (2016 interim:
approximately 81.6%). In terms of the composition of gas sales throughout
the period, industrial piped CBM sales accounted for approximately 87.3% of
total sales (2016 interim: 80.4%), while residential piped CBM sales
contributed approximately 12.7% (2016 interim: 19.6%). Same as last year,
all CBM was sold by pipeline.
*Raw Coal Washing Project*
In view of the extreme excess production capacity of the coal industry, the
supply-side reform was launched in 2015 in China and improvement has
gradually been seen since 2016. In the first half of 2017, the coal price
continued to rise. It is expected that following the gradual implementation
of the policy, the industry will progressively pick up. Pursuant to the sale
and purchase agreement entered into by both parties, the vendor will provide
the Group with profit guarantee for six consecutive years and the project
has already contributed stable income and cash flow to the Group. During the
period, the coal washing operation recorded a total sale of refined coal
approximately 218,500 tonnes (2016 interim: 93,500 tonnes) which has
increased by approximately 134% as compared to the same period of last year.
*Prospects *
Looking ahead, Dr. Dai Xiaobing, Chairman of the Group said, "The Group will
seize the opportunity to accelerate the construction and development of
Sanjiao CBM Project in order to meet China's growing energy demand while
consolidating the Group's core competitiveness and to lay a solid foundation
for further expansion and development. In the future, with the development
and operation of Sanjiao CBM Project, we believe the Group has sufficient
strength to embrace more business opportunities in China and other
countries. The Group will ride on the robust core business to speed up the
pace of foreign expansion; actively looking for oil and gas assets with
potential to become a professional international oil and gas player."
*About Sino Oil and Gas Holdings*
Sino Oil and Gas Holdings Limited is a leading oil and gas developer and
explorer. The Group is principally engaged in natural gas and oil
exploration and extraction with a focus on unconventional gas -- Coal Bed
Methane ("CBM"). Sanjiao CBM project is the Group's core business and the
Group will conditionally and strategically extends its business to midstream
and downstream. On this basis, the Group will balance the development of its
gas and oil business portfolio, strengthen the overseas business plan and
seek for merge and acquisition opportunities of high-quality oil and gas
resources globally.
Document: http://n.eqs.com/c/fncls.ssp?u=XMORADUMNG [1]
Document title: Turnover Increased by 300% in the First Half of 2017
25/08/2017 Dissemination of a Financial Press Release, transmitted by EQS
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(END) Dow Jones Newswires
August 25, 2017 11:43 ET (15:43 GMT)
