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Profit for the Year Reaches RMB106.6 Million; Achieves Production and Reserve Growth;
Panzhuang Concession Entered Production Phase on 1 November 2016 |
HONG KONG, Apr 5, 2017 - (ACN Newswire) - AAG Energy Holdings Limited ("AAG Energy" or the "Group"; HKEX stock code: 2686), the leading independent coalbed methane ("CBM") producer in China, announced its annual results for the year ended 31 December 2016. Profit for the year was RMB 106.6 million.
In 2016, the Chinese economy grew at a slower pace while the global oil and gas market remained destressed. Despite the challenges faced, the Group continued to stay focused on production increase, cost control and new business development. With its strong fundamentals, both production and reserve growth were achieved. In 2016, total gross production increased by 7% to 541 million cubic meters ("MMCM") (19.1 billion cubic feet ("bcf")), comprising 506 MMCM (17.9 bcf) from Panzhuang and 35 MMCM (1.2 bcf) from Mabi. The gross gas sales volume increased by 3.5% to 496 MMCM (17.5 bcf), compared with 2015. As at year-end 2016, net Proved + Probable ("2P") natural gas reserves was approximately 698 bcf, representing a 4.1% increase year-on-year.
Dr. Stephen Zou, Chairman and Executive Director of AAG Energy, said, "Despite the challenges encountered, AAG Energy attained monumental achievements in 2016. Panzhuang became the first ever Sino-foreign CBM project to complete development and officially enter production phase, while Mabi finished another year of great improvements with record pilot production as it approaches Overall Development Plan Phase I ("ODP I") approval. In addition, in the 13th Five-Year Development and Utilization Plan for Coalbed Methane published in November 2016, the National Energy Administration ("NEA") highlighted Panzhuang and Mabi as the leading CBM assets in China for developed and developing phases respectively."
During the year under review, the gross production of Panzhuang increased by 3.7% to 506 MMCM compared to 2015. Its utilization rate remained at 98% of gross production in 2016. Panzhuang's gross sales volume increased by 3.5% to 496 MMCM compared to 2015.
For the Mabi concession, its gross pilot production increased to 35 MMCM in 2016, the 2016 average daily production for Mabi was 95.5 thousand cubic meters ("MCMD"), a 119% increase year-on-year.
In 2016, all Mabi ODP I associated pre-approvals have been secured. The Mabi ODP I report has been revised based on the latest progress made in the Mabi pilot program and changed market conditions, and is currently under final review by our project partner, China National Petroleum Corporation ("CNPC"), and it will be submitted to the NDRC afterwards. Based on prior experience, once submission is made to the NDRC, Mabi ODP I approval is expected to be obtained within 6 to 12 month
AAG Energy also achieved outstanding Health, Safety and Environment ("HSE") performance with full year safety metrics of zero incidents per 200,000 man hours worked for both recordable and lost time incidents. Operating safely, responsibly, and sustainably is integral to AAG Energy's core business strategy. To show commitment to shareholders to invest in a sustainable way, AAG Energy has included a full Environment Social and Governance ("ESG") report in this 2016 annual report.
Looking ahead, the PRC government plans to encourage the use of more natural gas to replace coal consumption, which will further contribute to an increase in China gas demand and natural gas' competitiveness over oil and other hydrocarbon products. In view of the growing demand for natural gas, AAG Energy will continue making investments in Panzhuang and Mabi.
"As a high productivity, low-cost upstream gas producer with a strong balance sheet of US$516 million (comprising US$342 million cash and US$174 million unutilized loan), AAG Energy is confident and well positioned to further expand our production in Panzhuang and commercial development in Mabi, aiming to satisfy China's growing energy demand. At the same time, we will continue to pursue new oil & gas business opportunities within China and in other regional markets, maintaining our mission to invest in a sustainable way by providing the Chinese community with cleaner energy," Dr. Zou concluded.
A copy of the report can be found HERE or on the financial reports page: http://www.aagenergy.com/article/1089
About AAG Energy Holdings Limited (HKEx stock code: 2686)
AAG Energy Holdings Limited is an international energy company and a leader in China's CBM exploration and development sector. It focuses on developing and optimizing the value of unconventional gas resources to supply clean energy to the Chinese economy. AAG Energy's key operating assets, Panzhuang and Mabi concessions, are located in the Southwestern part of Qinshui Basin, which boasts the largest proved CBM geological reserves of any basin in China. AAG Energy's Panzhuang concession in partnership with China United Coalbed Methane Corporation Ltd., is the most commercially advanced Sino-foreign CBM asset in China and the first Sino-foreign CBM cooperative project to have entered full-scale commercial development and production. The Project has a designed annual production capacity of 500 million m3. AAG Energy's Mabi CBM Project in partnership with PetroChina received preliminary ODP Phase I approval from NDRC in November 2013. The designed production capacity of Mabi Phase I is 1 billion m3 per year. With proven ability to commercialize CBM and a highly-respected management team, the Group has attracted support from leading international and Chinese investors including Warburg Pincus, Baring Private Equity Asia, Chinastone and Ping An. For further details, please visit www.aagenergy.com.
Topic: Press release summary
Source: AAG Energy Holdings Limited
Sectors: Daily Finance, Daily News, Alternative Energy
https://www.acnnewswire.com
From the Asia Corporate News Network
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