Chinese coal bed methane group Green Dragon Gas is set for a very interesting 2010. Having introduced ConocoPhillips as a joint venture partner and raised $75m (£50m) through a placing, it is now set to accelerate the commercialisation of gas production from two of its six licence blocks. It targets doubling production this year to 1bn cubic feet (bcf) of gas and ramping up to 18bcf by the end of 2011 as part of its ambitious $250m two-year capital investment programme.
All this has been made possible by Green Dragon proving the commercial efficacy of the licensed SIS horizontal well technology, which produces twice the volumes of conventional vertical wells. In fact, gas flow has been so strong the group has had to choke production and burn some gas to allow infrastructure development to catch up with output.
This year, Green Dragon plans to access an additional 20 retail outlets selling compressed natural gas as vehicle fuel, which offers high margins. Prior to these results, broker Evolution Securities was forecasting 2010 pre-tax losses of $22m and a loss per share of 21¢.
| GREEN DRAGON GAS (GDG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 698¢ | MARKET VALUE: | £841m | |
| TOUCH: | 695-700¢ | 12-MONTH HIGH: | 775¢ | LOW: 525¢ |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 463¢ | NET CASH: | $21.7m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2006* | nil | -4.2 | -4.5 | nil |
| 2007 | nil | -9.0 | -9.3 | nil |
| 2008 | 24.6 | -23.2 | -22.5 | nil |
| 2009 | 46.9 | -28.8 | -27.6 | nil |
| % change | +90 | - | - | - |
*9-month period £1=$1.497 | ||||
