Green Dragon signs agreement with China's CNOOC

29th Oct 2013 14:48

Coal-bed methane specialist Green Dragon Gas has signed a non-binding preliminary agreement with state-owned China National Offshore Oil Corporation (CNOOC).Green Drago, which has six production sharing contracts (PSCs) in four Chinese provinces across 1.6m acres of licence area land, said it has entered into a non-binding heads of agreement with CNOOC's Overseas Oil and Gas Corporation subsidiary regarding a potential transaction between the two companies.This is in relation to drilling that had been carried out on its licence area land without its knowledge. Earlier in October Green Dragon was notified that, without its prior knowledge, around 1,500 wells were drilled on five of its six PSC blocks by several Chinese coal-bed methane gas companies, at a cost of more than $500m.The company said at the time that it believed it would accrue revenue and reserves from the wells drilled by these companies.OH