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Green Dragon Gas confident of increasing output six fold

World Coal,

China based firm, Green Dragon Gas, has forecast that production of coalbed methane (CBM) from its wells will grow six fold by the end of 2014 and that the company was confident of receiving funding the drilling needed to reach its long-standing output target. 

The company said its own operations were on track to produce 18 billion ft3 of CBM by the end of 2014, a six fold jump from the 2.9 billion ft3 it produced over 2013.

Hitting the target would cost over US$ 200 million and require the drilling of 150 wells. The company said it was considering its options in regard to funding.

Green Dragon has already secured US$ 100 million from a convertible bond from Singapore’s sovereign wealth fund and is in talks about funds owed to it by third parties among other options.

“We note that CBM companies producing less gas and with lesser audited reserves in China have reserve-based loans in place, which could also be a viable option for us,” Green Dragon’s founder and chief executive Randeep Grewal, who owns 65% of the company, said in a statement.

Third parties owe funds to Green Dragon after companies, including state-owned Chinese oil and gas companies PetroChina and CNOOC, drilled on its licenses during a period of confusion over the ownership of those licenses.

In July 2013, the Chinese government confirmed that Green Dragon held the rights to the license areas; however, the company found that several Chinese CBM companies had drilled around 1500 wells on the sites. 

Edited from various sources by Sam Dodson

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