CUCBM pledged to invest an additional $100 million into GSN in exchange of a further 10 percent working stake (in addition to an estimated $100 million invested so far); CUCBM pledged to continued cooperation with GDG with complete information sharing across wells drilled on PSCs and all local support; PSC exploration terms extended for an additional two years; GDG expects $250 million further GSS infrastructure investment from CUCBM
The agreement also allows the Company to open a cooperative and positive chapter in relations with CNOOC and CUCBM.
CUCBM will also invest US$250mln to upgrade the infrastructure at the already generating Shizhuang South (GSS) block.
Green Dragon said in October 2013 that nearly 1,500 wells had been drilled on the five permits in China without its knowledge, with the majority, around 1,300, drilled by CUCBM on Shizhuang South (GSS).
Commenting on the Modification Agreement, Mr Wu Wei Feng, President of CUCBM, said that, "CUCBM and Sino Gas have enjoyed a strong working relationship since early in 2006.
Our Modification Agreement with Sino Gas opens up avenues for CUCBM and Sino Gas to cooperate on new coal bed methane, shale gas and other unconventional gas opportunities in the future", said Mr Wu.
The Modification Agreement is a key step that enables Sino Gas and CUCBM to focus on obtaining the Chinese Reserves Report, and renews the partners' commitment to appraise the shallow CBM resources on the PSC", said Mr Lyons.
The Modification Agreement will now be submitted by CUCBM to the Ministry of Commerce (MOFCOM) in China for formal approval.
In this area, Sino Gas is also working with CUCBM to agree a location for a new well to be drilled during 2011.
FLG is the operator of the Liulin CBM PSC in China, and has a 50% equity stake in that project, with CUCBM
holding the remaining 50%.
A critical part of doing what needs to be done relies on our strong and effective relationships with our PSC partners PetroChina (SHA:601857) (HKG:0857) (NYSE:PTR) and CUCBM
McElwrath, President and CEO of Far East Energy, commented, "We share the strong commitment of CUCBM
to accelerate the development of CBM resources in China.