Sino Oil & Gas Reports 20% Increase in First Quarter CBM Sales

China focused oil and gas explorer Sino Oil and Gas Holdings Limited has reported a 20 percent rise in first quarter coal bed methane (CBM) sales.

In a statement published on its website, the company said it CBM sales in first quarter of 2016 that ended on March 31 stood at 14.65 million cubic meters compared with 12.13 mcm in the same period last year.

The CBM sales for the period were composed of industrial piped CBM sales and residential piped CBM sales which accounted for 79.8 percent and 20.2 percent, respectively. The company attributes higher sales to increase in production.

Production during the period stood at 14.77 mcm, up more than 17 percent on year. However, revenues to dropped to HK$16.78 million from HK$18.21 million due to almost 20 percent reduction in CBM sales price.

Sino Oil & Gas said Chinese government’s recent decision to increase subsidy on CBM production from RMB 0.2 per cubic meter to RMB 0.3 per cubic meter will have direct positive impact on the development of it’s Sanjiao CBM project as well as the entire industry in the long run.

Sanjiao block, located in Shanxi and Shaanxi provinces, is the group’s core business. By the end of the first quarter of 2016, the Sanjiao CBM project has completed a total of 92 wells, including 44 multi-lateral horizontal wells, while the remaining 48 are vertical wells. Out of the aforesaid 92 wells, 68 wells are under dewatering stage, of which 59 wells have accessed to the gas collection pipeline network.