(15 July 2014, Hong Kong) MIE Holdings Corporation (“MIE” or the “Company”, together with the subsidiaries, the “Group”; Stock Code: 1555), an independent oil and gas company engaged in the exploration and production of oil and gas in China, Kazakhstan and USA, is pleased to announce encouraging test results from the first horizontal well, TB-1H in the Linxing Production Sharing Contract (“PSC”), operated by Sino Gas & Energy Ltd (“SGE”), a joint venture investment of MIE.
Well TB-1H is the first horizontal well drilled in Linxing PSC, which lies in the eastern part of the Ordos Basin. Drilled in October 2013 with vertical depth of 2,025 meters and horizontal section length of 1,176 meters, total investment of this horizontal well costs approximately US$5 million.
During June 2014, a nine-stage hydraulic fracture completion was performed on the TB-1H well. Flow testing was conducted over 80 hours in two stages, achieving a gas flow rate of 4.93 million cubic feet per day (approximately 140,000 cubic meters per day) at a relatively stable flowing tubing head pressure of 2,008 psi (approximately 13.84Mpa). This positive test result underscores the potential that horizontal wells can significantly enhance the value of both Linxing and Sanjiaobei PSCs, and represent successful application of horizontal drilling technology in MIE’s various oil and gas projects. Pursuant to the 2014 development plan, SGE will be drilling another horizontal well in the Linxing project during second half of 2014.
With the encouraging test results for the vertical well TB-26 reported earlier, this horizontal well TB-1H stands as yet another drilling success in Linxing PSC with a significant test flow rate. Both the TB-26 and TB-1H wells will be connected to a pipeline system by end of 2014 as part of SGE’s pilot production pipeline gas sales program.
Meanwhile, as of June 30 2014, MIE has completed its full US$90 million cash call obligations into SGE, in accordance with the Purchase and Subscription Agreement between, among others, MIE and Sino Gas & Energy Holdings Limited (collectively, the “Investment Partners”) dated June 25 2012. Subsequent capital investments into both the Linxing and Sanjiaobei PSCs will be undertaken by the Investment Partners jointly and in proportion to the Investment Partners’ equity interests in SGE. MIE is pleased that the contributions into SGE have shown positive indicative returns, and the Company believes that both the Linxing and Sanjiaobei PSCs will continue to significantly enhance shareholder value for MIE.
About MIE Holdings Corporation
MIE is an independent oil and gas company engaged in the exploration and production of oil and gas in China, Kazakhstan and USA. The Group operates the Daan, Moliqing and Miao 3 oilfields in the Songliao Basins and Dagang — Kongnan block in the Huanghua Basin under four separate production sharing contracts with PetroChina, the largest oil company in China, and holds a 51% stake in SGE that operates Linxing and Sanjiaobei unconventional gas assets located in the Ordos Basin under two separate production sharing contracts. The Group also holds an exploration contract and four production contracts that allow the Group to conduct exploration and production activities in the Mangistau province in the southwestern region of Kazakhstan. In addition, the Group pursues other development and production opportunities in China, and exploration, development and production opportunities internationally, both independently and in partnership with other major and independent oil companies.
MIE is listed on the Main Board of the Stock Exchange of Hong Kong Limited with stock code 1555.
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