London-listed Green Dragon Gas (GDG) has announced that the Qinshui Basin Chengzhuang Cooperative CBM Block (GCZ Block) Development Plan has been approved by the consultation center of China National Petroleum Corporation (CNPC).
The GCZ Block is located in the prolific Qinshui Basin with an area of 67 km², approximately 20 km south of the Greka Shizhuang South Main Block (GSS Block).
There are two major laterally continuous shallow coal seams present throughout the GCZ Block, namely, coal seam #3 and #15. CBM in this area is imbedded in the coal formations at average depths, ranging from 300m to 600m. The block has been in commercial production since 2010.
The development plan includes the drilling of an additional 147 production wells in 2017 & 2018. These wells will be targeting both coal seam #3 & coal seam #15. Costs for the development of GCZ is budgeted to be c.$53.80 million over 2017 and 2018.
Estimated gross annual production of 3.01 Bcf in 2017, with production estimated to increase to 3.23 Bcf (2.64 Bcf from existing wells and 0.59 Bcf from new wells) in 2018.
Randeep S. Grewal, chairman and founder of Green Dragon Gas, commented: “This is a significant step forward for GDG and a further realisation of our strategy of progressing our resource base through to long term production.I would like to note and welcome the continued and consistent support of the Chinese central government for CBM in China and its plans to aid the coal bed methane industry. I look forward to announcing the progress of GCZ, alongside our partners CNPC and PetroChina, as we implement the development plan and drive our production growth.”
The block is split in proportion to working interest between GDG (47 per cent) and CNPC (53 per cent - operator).