Sino Gas And Energy Holdings Limited (ASX:SEH) Continued Strong Operational Progress Towards Development

Perth, June 28, 2011 AEST (ABN Newswire) - Sino Gas & Energy Holdings Limited (ASX:SEH) continues with its active development focused work program.

At the start of Q2 2011, Sino Gas completed the planning for its 2011 work program and commenced active field operations. The plans announced at that time included:

- focus on and expansion of the Pilot Program;

- further stimulation and testing of the TB09, TB08, TB03 and TB06 wells;

- an extensive seismic program on the Sanjiaobei PSC; and

- drilling of new wells on both the Linxing and Sanjiaobei PSC's.

Reporting on the Company's progress, Sino Gas's Managing Director, Stephen Lyons said that he was very pleased with the Company's operational progress.

"Following on from the successful commissioning of first gas into a CNG tanker on the SJB03 well, Sino Gas has continued its active testing program on existing wells.

Sino Gas has so far achieved commercial wells rates on its TB09 well (gas flow rate of 1,150,500 scf/day) and its TB03 well (gas flow rate of 326,500 scf/day). Testing of the TB08 well is being completed and this well is also achieving flow rates above those required to generate commercial returns.

As announced last week Sino Gas has also signed two key contracts relating to its Sanjiaobei PSC. The first is the appointment of the Chinese consultancy designed to achieve the Chinese Reserves approvals, the second kicks off an extensive seismic program which is expected to increase Sino Gas's potential reserves area from the current 70km2 to more than 400km2", said Mr Lyons.

TB08 Well test continues: stable gas flow rate of ~ 300,000 scf/day

Sino Gas is in the process of completing the flow test on its TB08 well.

As part of the testing procedure, Sino Gas's testing contractor, CCDC Changqing Downhole Service Company (CCDC) has now completed a hydraulic fracture stimulation of an upper 'pay zone' on which initial testing was conducted late last year.

The well is currently being flowed back in order to remove all of the frac fluid from the formation. As at 18:00 hours yesterday, 27 June 2011, the well is continuing to clean up and is flowing gas.

The well is currently flowing gas at a relatively stable flow rate of ~ 300,000 scf/day at a Tubing Head Pressure of ~ 140 psi.

Forward operations are to continue to clean up the well and to install pressure gauges for a flowing pressure gradient test. Following this the well will be shut-in for a pressure buildup test.

There are additional potential gas pay zones in TB08 that remain to be assessed in future operations.

TB06 Well test - mobilisation of test rig to commence

As the test on the first 'pay zone' in the TB08 well is completed, Sino Gas will mobilise test equipment to its TB06 Gas Discovery Well.

The TB06 well was drilled by Sino Gas in Q4, 2008 and remains untested. Sino Gas's intention is to first conduct a drill stem test (DST) of a prospective upper zone identified by electronic logs. Depending on the results of the DST the well could then be hydraulically fracture stimulated.

Share Issue to SpringTree Special Opportunities Fund LP

Further to the Company's announcement of 27 April 2011, Sino Gas has issued shares to SpringTree Special Opportunities Fund LP as per the attached notice pursuant to Section 708A(5)(e) of the Corporations Act and Appendix 3B, see link:

Contact

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