Sino Gas And Energy Holdings Limited (ASX:SEH) 2010 Work Program Ends With Successful Flow Test On SJB03 Gas Discovery Well

Perth, Dec 29, 2010 AEST (ABN Newswire) - Sino Gas & Energy Holdings Limited (ASX:SEH) (Sino Gas) has now ended its 2010 work program with a successful flow test on its SJB03 Gas Discovery Well.

The SJB03 Gas Discovery well was drilled during November 2010 with the electronic wireline logs confirming the presence of gas in 3 potential zones.

After resolving operational issues, CCDC Downhole Technical & Operations Company (CCDC) perforated the 1st pay zone and successfully flowed gas without the need for further stimulation at this time.

As at 13:00 hours, Monday, CCDC had flowed gas from the 1st zone at a relatively constant flow rate of approximately 280,000 scf/day for a continuous period of 24 hours.

A Drill Stem Test (DST) involving a gradient and pressure build up test is currently underway to obtain downhole pressure measurements. This information will enable Sino Gas to determine whether it will seek to enhance the productivity from this zone through fracture stimulation or to otherwise produce from this zone in the Company's Pilot Development Programs.

Following the DST, Sino Gas will suspend the SJB03 well for further operations to be carried out after the end of the Chinese winter in late Q1, 2011.

Sino Gas Managing Director, Stephen Lyons, said that the successful test was a fitting conclusion to the Company's 2010 reserves upgrade work program.

The safe and successful conclusion to the 2010 work program is a testament to the Operations Team led by Sino Gas's Chief Operating Officer, Frank Fu. During the 2010 campaign, over 160,000 man hours have been performed without incident by the drilling and testing teams.

The data obtained from these tests on SJB-03 will now, together with all the other data obtained during 2010, be used in Sino Gas's reserves upgrade report, with an updated reserves certification report planned to be completed in late January. From there, the results will be used to develop the forward work programs and in planning for the Company's Pilot Development Programs", said Mr Lyons.

Now that the Company's 2010 work program is complete, Sino Gas will be updating the market on developments as they occur.

TB08 Gas Discovery well - flow testing operations complete

Electronic wireline logging on the TB08 Gas Discovery Well has confirmed the presence of gas in 4 potential zones.

Sino Gas has now successfully completed the perforation and DST of the 2nd zone with the DST tool being retrieved and all downhole data being downloaded.

Based on the initial analysis Sino Gas intends to fracture stimulate the 2nd zone.

A successful DST has now been conducted on both the 1st and 2nd zone of the TB08 Gas Discovery Well. The data obtained from these tests, together with that to be obtained from the analysis of the side wall core samples taken will assist in determining the most appropriate stimulation technique for the various prospective zones in this well.

CCDC has now secured the well in preparation for further stimulation expected to be carried out in late Q1, 2011 and has rigged down all equipment and demobilised from the site.

Contact

Stephen Lyons Managing Director Sino Gas & Energy Tel: +86-139-1148-1669 +86-10-6530-9260 Email: slyons@sinogasenergy.com Gavin Harper Executive Director Sino Gas & Energy Email: gharper@sinogasenergy.com Sam Snyder Non Executive Chairman Sino Gas & Energy Email: ssnyder@sinogasenergy.com http://www.sinogasenergy.com