Sino Gas And Energy Holdings Limited (ASX:SEH) Secures A$29.4M Funding To Increase Gas Sales

Sino Gas & Energy Holdings Limited (ASX:SEH), an Australian company developing unconventional gas assets within the Ordos Basin, Shanxi Province China, is pleased to advise that it has signed an agreement to raise up to A$29.4 million in new funds from SpringTree Special Opportunities Fund, LP ("SpringTree"), a New York-based institutional investor, over the next two years (the "Agreement").

The funding enables Sino Gas to conduct the high impact appraisal program being planned for 2011 and 2012. Success in this program is expected to result in substantial increases in gas sales as Sino Gas moves towards developing a gas resource base (GIIP) of over 9 Tcf on the Linxing and Sanjiaobei Production Sharing Contracts (PSCs) in North China's industrial heartland.

Under the Agreement, Sino Gas will receive A$1.2 million from SpringTree on execution and SpringTree will invest A$600,000 to A$1.2 million, in Sino Gas's shares approximately monthly, over the next two years. Sino Gas will issue such shares at prices linked to the prevailing share price at that time.

Sino Gas Managing Director, Mr Stephen Lyons, said that the Agreement recognized the significant achievements being made by the Company.

"SpringTree is a New York-based investment fund that makes equity and equity-linked investments in high growth potential public companies around the world. SpringTree has been active in Australia and has successfully funded such companies as Linc Energy Limited (ASX:LNC) (PINK:LNCGY), Prima BioMed Limited (ASX:PRR), Solimar Energy Limited (ASX:SGY), Buccaneer Energy Limited (ASX:BCC) (PINK:BCGYF) and Legacy Iron Ore Limited (ASX:LCY).

The Agreement allows the Company to confidently implement its commercialisation plans whilst preserving the flexibility to continue to explore investment arrangements with potential strategic partners", said Mr Lyons.

"This is our fifth ASX-listed energy investment in the recent couple of years, and our ASX energy portfolio has performed very well historically. We have been impressed with Sino Gas' management team and progress to date. We hope that our funding will enable Sino Gas to implement its plans and unlock the value of its assets", said Eugene Tablis, a Managing Director of SpringTree Global Investors, LLC, the General Partner (Manager) of SpringTree.

The key terms of the Agreement can be viewed at http://www.abnnewswire.net/media/en/docs/538722.pdf' target=_blank>http://www.abnnewswire.net/media/en/docs/538722.pdf' target=_blank>http://www.abnnewswire.net/media/en/docs/538722.pdf


About Sino Gas And Energy Holdings Limited

Sino Gas & Energy Holdings Limited (ASX:SEH) is an Australian company focused on developing Chinese unconventional gas assets.

The Company has operated in Beijing since 2005 and holds a portfolio of unconventional gas assets in China through Production Sharing Contracts (PSC's).

The PSC's are located in Shanxi province in the Ordos Basin and cover an area of 3,000km2. The Ordos Basin is the second largest onshore oil and gas producing basin in China. The area has mature field developments with an established pipeline infrastructure to major markets. Rapid economic development is being experienced in the provinces in which Sino Gas's PSC's are located and natural gas is seen as a key component of clean energy supply in China.

On Sino Gas's Tuban prospect, 11 wells have been drilled, the latest being SJB1 during October 2011. Extensive seismic and other subsurface studies have also been conducted. Multiple wells have been flow tested with commercial flow rates achieved on many of the wells, including significant commercial rates on its TB07, TB09 and TB04 wells. The gas flow rates in this release are estimated at 200 psi Flowing Tubing Head Pressure (THP) unless otherwise noted.

The statements of resources in this Release have been independently determined to Society of Petroleum Engineers (SPE) Petroleum Resource Management Systems (SPE PRMS) standards by internationally recognized oil and gas consultants RISC Pty Ltd. All resource figures quoted are mid case - 100%.

Additional information on Sino Gas can be found at www.sinogasenergy.com


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