China Focused CBM Player Green Dragon Gas Ups 2016 Output Target by 33%
Green Dragon Gas has set a production target of 16 billion cubic feet (bcf) for 2016, a 33 percent increase on 2015.
In an update for the year ended 31 December 2015 issued Wednesday, the China focused coal bed methane player said this increase is expected to significantly further enhance the company's cash flow generation, which will result in both the delivery of its maiden bottom-line profit and enable capital investment to generate further growth.
The company also anticipates a continued robust and consistent gas pricing environment in China during the course of the coming year. Green Dragon, together with its partners, is currently implementing a significant infrastructure programme aimed at increasing gas processing and sales capacity from its existing drilled wells. The programme focuses on existing drilled well connections across the commercial acreage to drive monetisation of the company's portfolio.
The company said that end of year gross annual production capacity of 12.12 bcf per annum exceeded 2015 target of 12.0 bcf per annum. Annual gas processing capacity at Shizhuang South (GSS) coal bed methane production block in Shanxi increased by 79 percent to 22.7 bcf per annum following the completion of a further two processing facilities by China National Offshore Oil Corporation (CNOOC).
Randeep S. Grewal, Chairman and Founder of Green Dragon, commented: "Our performance in 2015 is contrarian to the energy industry at large. Against a backdrop of unprecedented economic and political turmoil in the traditional energy markets and near record low oil prices, we expect to see our performance further enhanced in 2016 in terms of production, sales, profitability and cash flow, as gas pricing remains robust and consistent in China with some of the highest margins seen anywhere in the world. 2016 is Green Dragon's tenth anniversary as a listed company and we expect it to be our best operational and financial performance since inception twenty years ago."
CNOOC will further progress infrastructure build on GSS toward ultimate 53bcf annual processing and sales capacity through 2017, Green Dragon said.