China - Dagang
The original contract, signed in 1997, had exploration, development and production rights over an area of 22,400 gross acres in six blocks. Current production and operations take place in three blocks, Duannan, Xiaoji and Xixiepo, with a total area of 12,108 gross acres.The company began drilling a five-well pilot program in 1998. A total of 44 development wells have been drilled and completed, all of which are capable of production.
The Company has selected five additional well locations and will decide on drilling these locations based on oil-price developments and availability of financing. Following evaluation of this program, additional drilling locations may be selected. Over the past three years the company has successfully implemented a fracture stimulation program that has had a mitigating effect on production decline.
Oil delivered by Sunwing to Petrochina is paid for in US Dollars, based on world oil prices.
Dagang is in the centre of the well known oil-producing region in Hebei province.
Sunwing initiated the development of Dagang in 1998, and has drilled over 44 development wells.
