G3 Exploration gets approval for development of Chengzhuang Block in China

LONDON -- G3 Exploration Ltd., an independent specialist in the exploration and development of coal bed methane gas (CBM) with roots in China and a focus on international expansion, has announced that the China National Development and Reform Commission (NDRC) has issued its final approval for the Overall Development Plan (ODP) on the Chengzhuang Block (GCZ).

NDRC has approved the ODP, consistent with its policy to accelerate CBM development in China, boost green energy supply, and improve coal mine safety production and to reduce CO₂ emissions. This final NDRC approval facilitates the permits for the Company and its partner to further develop the acreage.

The Company has a 47% participating interest in the GCZ Block with its 53% partner, China National Petroleum Corporation (CNPC).

GCZ ODP highlights

• The project is located in Shanxi Jincheng Qinshui county with a contract area of 67 km² of which ODP covers an area of 33 km²
• The ODP area of 33 km² has 294 Bcf of gas in place, with estimates of recoverable proved reserves of 176 Bcf
• 114 wells have been drilled on the acreage of which 85 wells are selling gas
• The development plan includes the drilling of an additional 147 production wells
• Acreage contains coal seam #3 and #15 gas bearing reservoirs
• Gross production capacity from the ODP is estimated to be 180 million cubic meters per year (6.35 Bcf per year)
• The development cost for GCZ is expected to be c. $55 million over the next two years starting from fourth quarter 2018. Each party is expected to invest according to its participating interest in the Block
• GCZ is a commercial gas producing block which has been profitable since September 2015 and continues to be so
• The GCZ Block is jointly operated by CNPC and the Company through a joint management team based in Jincheng, Shanxi

In addition to the above, NDRC approval has emphasised on strengthening the health, safety and environment (HSE) management systems to fulfill the objective of no accidents and zero pollution to the environment. Regarding HSE, the Company has since inception, along with its Chinese partners, been committed to working to the highest standards of HSE in all of its operations. Our teams have diligently been committed to safety at all times with zero lost time incidents recorded year-on-year.