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Public company info - Sino Oil and Gas Holdings Ltd. , 00702.HK
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Sino Oil and Gas Holdings Ltd., 00702.HK - Company Profile
Chairman Dai Xiaobing
Share Issued (share) 3,345,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Coal
Corporate Profile Business Summary: The principal activities of the Group are operation of (i) exploration, development and production of coalbed methane, (ii) raw coal washing and sale of raw and cleaned coal, (iii) exploitation and sale of crude oil and natural gas, and (iv) provision for financial services. Performance for the year: During the year ended 31 December 2020, Sino Oil and Gas Holdings Limited (the “Company”) and its subsidiaries (collectively the “Group”) recorded a total revenue of approximately HK$325,371,000 (2019: HK$476,614,000). For the financial year of 2020, the Group recorded a net loss of approximately HK$182,879,000 (2019: net loss HK$227,642,000), which was decreased significantly by nearly20% compared with last year. During the year, the Group recorded earnings before interest, taxes, depreciation and amortization (“EBITDA”) of approximately HK$82,874,000 (2019: HK$98,152,000). Business Review： Natural Gas and Oil Exploitation Coalbed Methane Exploitation—Sanjiao Block in the Ordos Basin Project Overview Through its wholly-owned subsidiary Orion Energy International Inc. (“Orion”), the Group has a production sharing contract (“PSC”) with China National Petroleum Corporation (“PetroChina”), its partner in the PRC, for exploration, utilization and production of the CBM field in the Sanjiao block, located in the Ordos Basin in Shanxi and Shaanxi provinces. The Group has a 70% interest in the PSC. According to a competent person’s updated report provided to the Company by the end of 2015, the proved and probable CBM reserves of Sanjiao CBM Project amounted to approximately 8.301 billion cubic meters and the net present value at 10% discount of the future revenue of the reserve was approximately HK$11.498 billion. Following the approval of the overall development plan by the National Development and Reform Commission (“NDRC”) in 2015, Sanjiao CBM Project was granted a mining permit by the Ministry of Land and Resources of the PRC with an approved CBM production capacity of 500 million cubic meters per annum in July 2017, which shall be valid for 25 years. Accordingly, all necessary administrative approvals under the current PRC laws and regulations have been granted for exploration, development, exploitation and production of Sanjiao CBM Project. Infrastructure As at 31 December 2020, Sanjiao CBM Project has completed a total of 140 wells, including 18 newly added wells compared with last year, and comprising 88 multilateral horizontal wells and 52 vertical wells. Out of the total 140 wells, 102 wells are in the normal dewatering and gas producing stage, of which 102 wells have accessed to a gas collection pipeline network. A ground pipeline network of approximately 18 kilometers, inter-well pipelines of approximately 87.7 kilometers, and outbound pipelines of approximately 17 kilometers have been completed. Approximately total 87.5 kilometers of 10KV power grid and branch power line have also been installed. To cope with the increasing production volume of Sanjiao CBM Project, the Group has undertaken the expansion of the processing station. Its daily processing capacity will reach 750,000 cubic meters upon completion while its total daily processing capacity of CBM is 500,000 cubic meters now. Sales During the year, Sanjiao CBM Project recorded EBITDA of approximately HK$71,235,000 (2019: HK$87,918,000). The CBM sales revenue amounted to approximately HK$109,918,000 (2019: HK$120,900,000). The production and sales volume of CBM were approximately 101.75 million cubic meters (2019: 103.22 million cubic meters) and 96.37 million cubic meters (2019: 100.87 million cubic meters) respectively, resulting in a gas sale-to-production rate of approximately 94.7% (2019: 97.7%). For the year, industrial and residential piped CBM sales accounted for approximately 88.15% (2019: 84.1%) and approximately 11.85% (2019: 15.9%) of total sales respectively, which was similar to that of last year. In addition, the government subsidy and part of VAT tax refund of approximately HK$24,430,000 (2019: HK$38,886,000) for sales of CBM were received and disclosed in “other income” during the year. The operation of Sanjiao CBM Project continued to have a steady growth, and the Group believes that the project will bring sustained and stable profits. Raw Coal Washing Project Located in Shanxi Province The Group owned a 75% equity interest of a raw coal washing project located in Qinshui Basin, Shanxi Province. During the year, due to the COVID-19 pandemic, the revenue from the raw coal washing business decreased, which was approximately HK$207,660,000 (2019: HK$350,353,000). The business has resumed to normal by the fourth quarter of last year. Others The Group owned a finance leasing company, Shaanxi Zhao Yin Finance Leasing Company Limited in Shaanxi Province. The major purpose of the establishment of this finance leasing company is to seek for proper financing options for the Group’s business development. Further it also provides short-term investment opportunities for the Group. During the year, it recorded a revenue of approximately HK$7,793,000 (2019 : HK$5,361,000). Prospects: Last year, COVID-19 pandemic had severely blow on global economy. Fortunately, due to the effective control of the pandemic in China, the economy has taken the lead in recovering. In 2020, its GDP increased by 2.3% compared with 2019. Meanwhile, during the "14th Five-Year Plan", China plans to continue to promote the clean and efficient use of coal, and develop new energy. This is targeting to reduce carbon emissions by 18%, and to create a road map for achieving carbon neutrality. The Group expects that the demand for clean energy, in particular for natural gas, is going strong and the prospect of natural gas industry will still be very promising. In 2020, the Group focused on an orderly development of the CBM project and added 18 multilateral horizontal wells, which is expected to increase more than 40 million cubic meters of CBM production capacity to Sanjiao CBM Project. The Group plans to accelerate the development in the coming 2-3 years so as to achieve 500 million cubic meters of production capacity. As a result, the Group believes that Sanjiao CBM Project will continue to have steady growth with increasing competitiveness in the long run. Its profitability will hence be further enhanced with good prospects. Looking ahead, despite the current increasingly complicated economic and political environment, the Group will press forward the development of Sanjiao CBM Project in order to accelerate the growth of revenue. The Group will maintain cautious financial management measures and conduct debt management with a proactive attitude. At the same time, the Group will further improve operating effectiveness and efficiency, monitor costs, and strengthen risk management so that the Group are capable to have prompt response to the unforeseeable market changes. The Group will always prepare for the future development and to ensure reasonable returns for shareholders.

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