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Brightoil raises gas reserves estimate at Western China fields

08th October 2014

Brightoil Petroleum has announced that new evaluation results show a substantial increase in the proved-plus-probable (2P) gas and oil reserves of Dina 1 Gas Field and Tuzi Gas Field, with an especially substantial increase in the former

Brightoil raises gas reserves estimate at Western China fields
Dina 1 Gas Field commenced natural gas production in October 2011, while Tuzi Gas Field commenced natural gas production in December 2013

“The latest reserve evaluation conducted by D&M clearly shows that both Dina 1 Gas Field and Tuzi Gas Field possess abundant natural gas resources with good investment value,” said Dr. SIT Kwong Lam, chairman of Brightoil Petroleum.

“Together with the Caofeidian project, which we had acquired earlier, the group currently owns three high-quality producing oil and gas fields.

“These assets are expected to bring us considerable profit and cash flow. Looking ahead, we will continue to expand our oil and gas reserves and output through organic growth and acquisitions.

“We are devoted to developing Brightoil Petroleum into a resource-focused international oil and gas enterprise.”

According to the report issued by D&M (DeGolyer and MacNaughton), 2P reserves at Dina 1 Gas Field as at 31 August 2014 recorded a remarkable 77 per cent increase of more than 9 million barrels of oil equivalent (boe) to 20.75 million boe from 11.70 million boe.

Meanwhile, 2P reserves of Tuzi Gas Field amounted to 31.15 million boe, up 2.45 million boe, or 8.5 per cent, from 28.70 million boe. The total 2P reserves of the Group’s two gas fields increased by 11.5 million boe, or 28.5 per cent. Together with the Group’s 2P reserves of 42 million boe at the Caofeidian Project in Bohai Bay, the Group’s aggregate 2P reserves have reached 93.9 million boe.

Brightoil believes that the increase in its 2P reserves at Dina 1 Gas Field was primarily due to production at its three producing wells in Dina 1 Gas Field being far better than expected, and D&M has taken into consideration new factors and data into its valuation work in regard to the special natural environment of Dina 1.2

According to the D&M report, interest from the net present value (NPV) of Dina 1 Gas Field and that of Tuzi Gas Field entitled to the group increased from USD 141.8m and USD 239.7m to USD 358.73m and USD 539.13m, respectively, as at 31 August 2014, representing a total growth rate of more than 135 per cent.

The substantial growth of the group’s interest in NPV of both gas fields was mainly due to the increase in their reserves, higher natural gas prices as expected and preferential tax rate obtained by the company.

Dina 1 and Tuzi Gas Fields are operated by Win Business Petroleum Group Limited and Win Business Petroleum (Grand Desert) Limited, respectively, which are the subsidiaries of the company, in partnership with China National Petroleum Corporation (CNPC). The two subsidiaries own 49 per cent stakes in the Dina 1 and Tuzi Gas Fields, respectively.

Both Dina 1 Gas Field and Tuzi Gas Field are located in the Tarim Basin in the Xinjiang Uygur Autonomous Region. Dina 1 Gas Field commenced natural gas production in October 2011, while Tuzi Gas Field commenced natural gas production in December 2013.

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