Sino Gas And Energy Holdings Limited - Secures A$29.4M Funding To Increase Gas Sales

09:58 AEST Apr 27, 2011 ABN Newswire (C) 2004-2011 Asia Business News PL. All Rights Reserved.

Perth, Australia (ABN Newswire) - Sino Gas & Energy Holdings Limited (ASX:SEH), an Australian company developing unconventional gas assets within the Ordos Basin, Shanxi Province China, is pleased to advise that it has signed an agreement to raise up to A$29.4 million in new funds from SpringTree Special Opportunities Fund, LP ('SpringTree'), a New York-based institutional investor, over the next two years (the 'Agreement').

The funding enables Sino Gas to conduct the high impact appraisal program being planned for 2011 and 2012. Success in this program is expected to result in substantial increases in gas sales as Sino Gas moves towards developing a gas resource base (GIIP) of over 9 Tcf on the Linxing and Sanjiaobei Production Sharing Contracts (PSCs) in North China's industrial heartland.

Under the Agreement, Sino Gas will receive A$1.2 million from SpringTree on execution and SpringTree will invest A$600,000 to A$1.2 million, in Sino Gas's shares approximately monthly, over the next two years. Sino Gas will issue such shares at prices linked to the prevailing share price at that time.

Sino Gas Managing Director, Mr Stephen Lyons, said that the Agreement recognized the significant achievements being made by the Company.

'SpringTree is a New York-based investment fund that makes equity and equity-linked investments in high growth potential public companies around the world. SpringTree has been active in Australia and has successfully funded such companies as Linc Energy Limited (ASX: LNC) (PINK: LNCGY), Prima BioMed Limited (ASX: PRR), Solimar Energy Limited (ASX: SGY), Buccaneer Energy Limited (ASX: BCC) (PINK: BCGYF) and Legacy Iron Ore Limited (ASX: LCY).

The Agreement allows the Company to confidently implement its commercialisation plans whilst preserving the flexibility to continue to explore investment arrangements with potential strategic partners', said Mr Lyons.

'This is our fifth ASX-listed energy investment in the recent couple of years, and our ASX energy portfolio has performed very well historically. We have been impressed with Sino Gas' management team and progress to date. We hope that our funding will enable Sino Gas to implement its plans and unlock the value of its assets', said Eugene Tablis, a Managing Director of SpringTree Global Investors, LLC, the General Partner (Manager) of SpringTree.

The key terms of the Agreement can be viewed at http://www.abnnewswire.net/media/en/docs/538722.pdf


About Sino Gas And Energy Holdings Limited:

Sino Gas & Energy Holdings Limited (ASX:SEH) is an Australian company focused on developing Chinese gas assets. The Company has operated in Beijing since 2005 and holds a portfolio of unconventional gas assets in China through Production Sharing Contracts (PSC's).

The PSC's are located in Shanxi province in the Ordos Basin and cover an area of over 3,700km2. The Ordos Basin is the second largest onshore oil and gas producing basin in China. The area has mature field developments with an established pipeline infrastructure to major markets. Rapid economic development is being experienced in the province in which Sino Gas's PSC's are located and natural gas is seen as a key component of clean energy supply in China.

On Sino Gas's Tuban prospect, 9 wells have been drilled, the latest being TB07 in November 2009. Extensive seismic and other subsurface studies have also been conducted. 4 wells have been fracced and tested with commercial flow rates achieved on the TB02 well, TB05 well and recently significant commercial rates on the TB07 well. 2.7 Tcf of Contingent and Prospective gas resources (100% mid case figures) have been independently verified on the Tuban Prospect.

The statements of resources in this Release have been independently determined to Society of Petroleum Engineers (SPE) Petroleum Resource Management Systems standards by internationally recognized oil and gas consultants RISC Pty Ltd. They are based on the Technical Report prepared by RISC Pty Ltd and included in full in the Company's Prospectus dated 29 July 2009. Quoted well flow rates are calculated at a tubing head pressure of 200psi.

Additional information on Sino Gas can be found at www.sinogasenergy.com


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