The Sanjiaobei PSC covers 1,123.93 km2 and is contiguous with Linxing West to the north and the producing Mizhi field to the southwest. The PSC has established reserves and resources in the deep gas play which will be exploited initially in the pilot production programme. Currently 85% of the block is considered to be discovered (including reserves and contingent resources) or prospective under the Society of Petroleum Engineers Petroleum Resource Management Systems (SPE PRMS).
Sino Gas holds a 24% net interest in Sanjiaobei through its shareholding of SGE. SGE (SEH 49%, CNEML 51%) holds a 49% interest in Sanjiaobei PSC. PetroChina CBM, a subsidiary of CNPC, holds the right to back in for 51% interest on ODP approval. The Sanjiaobei PSC exploration period currently extends to August 2015.
During 2013, 19 wells were drilled on Sanjiaobei, bringing the total number of wells drilled to 28. An additional 2 wells have been drilled in the first half of 2014 to support data needed for submission of the Chinese Reserve Report. Additional drilling of two wells to be tied into the pilot program was completed later in 2014.
In 2013, frac testing was conducted on eighteen payzones, with the final four payzones undergoing testing at year end. Three wells that completed tested during the fourth quarter of 2013 were flow tested at rates well above commercial rates, whilst further testing and comingling of zones of similar pressure is being considered on three wells that flowed at nominal rates.
In 2014, long term testing on two wells was undertaken, SJB14 and SJB16, for over two months each to provide data necessary for CRR submission. Both wells performed in line with expectations. A number of additional wells were frac tested during 2014.