Sino Gas And Energy Holdings Limited (ASX:SEH) Signed Key Contracts on Sanjiaobei Production Sharing Contract

Perth, June 24, 2011 AEST (ABN Newswire) - Continuing its progress towards development, Sino Gas & Energy Holdings Limited (ASX:SEH) is pleased to advise that it has signed two key contracts relating to its Sanjiaobei Production Sharing Contract (PSC).

The first contract will see the commencement of an extensive seismic program designed to expand the potential Development area from around 70km2 to more than 400km2.

The second contract relates to the appointment of a Chinese Reserves Consultancy to deliver the Chinese Reserves report and other services.

Sino Gas's Managing Director, Stephen Lyons said during a recent field trip to review the operations that the signing of the contracts reflected the significant progress being made towards the Company's development objective.

"Sino Gas has been working closely with PetroChina CBM (PCCBM) on its Sanjiaobei PSC to implement its work program and move towards development. The work program is designed to achieve Chinese Reserves approvals and the seismic and reserves consultancy contracts are key steps in that program.

Extensive seismic program underway

Following the signing of the contract with BGP Seismic Cooperation Company (BGP), Sino Gas is underway shooting around 400 km's of seismic on the Sanjiaobei PSC.

Sino Gas has to date focused on a 70km2 area in the North Western corner of the Sanjiaobei PSC. The high-density seismic program is expected to enable Sino Gas to expand its potential reserves area from the current 70km2 to more than 400km2.

The additional seismic is designed to provide additional data to support the Chinese Reserves report, enable better well location selection and planning for potential horizontal wells on Sino Gas's acreage.

BGP are a subsidiary of the Chinese Oil & Gas major, CNPC and one of the most experienced seismic companies in China. They have many years experience both worldwide and particularly in China having recently shot seismic on PSC's adjacent to Sino Gas's acreage.

As of 9:00 am yesterday, BGP had completed the surveying of approximately 50% of the lines to be shot and had drilled 25% of the shot points required to lay the seismic charges.

The seismic program is expected to be completed around the end of August 2011. Following this, Sino Gas expects to drill and test additional wells on the Sanjiaobei PSC.

Sino Gas has signed a Strategic Cooperation Agreement with the National Centre of Coal Bed Methane (NCCBM) to deliver the Chinese Reserves Report on the Sanjiaobei PSC. The Chinese Reserves report is a pre-cursor to Development approval in China.

NCCBM are a key Chinese research consultancy with extensive experience in Chinese gas developments.

Sino Gas is now working with NCCBM to frame out the key steps required for the Chinese Reserves Report on the Sanjiaobei PSC. Also contemplated with NCCBM is a range of additional services relating to sub-surface studies and development approvals.

Contact

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