China Gas Delivering a Cleaner Energy Mix for China Presented by Randeep S. Grewal, Green Dragon Gas Natural Resources Forum – 23 rd February 2016
Disclaimer This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any shares of Green Dragon Gas Ltd. (the “Company”) in any jurisdiction. The Company’s shares have not been and will not be registered under the US Securities Act of 1933 (the “Securities Act”) and may not be offered or sold within the United States absent registration und er the Securities Act or an exemption from registration. The information contained in this presentation is given in good faith but no representation or warranty is made in relation to the accuracy or completeness of the information, or any oral information provided in connection therewith, or the data it generates and no responsibility, obligation or liability is or will be accepted by the Company or its affiliates or advisors or by any of their respective officers, employees or agents in relation to it. This presentation contains certain forward looking statements with respect to the financial condition, results, operations and businesses of the Company. The statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements and forecasts. Past performance is no guide to future performance and persons needing advice should consult an independent financial advisor. This presentation and the information contained in it are confidential and should not be distributed, published or reproduced, in whole or in part, or disclosed by recipients directly or indirectly to any other person. China Gas: Delivering a balanced and environmentally prudent energy supply
China’s Energy Challenge More than Every week 80% 4 of growth in global coal coal-fired power plants per week consumption between 2003- commissioned 2015 2013 came from China China Gas: Delivering a balanced and environmentally prudent energy supply
Energy consumption per person - TOEPY China’s Energy Mix USA 7.2 4.7 Russia 3.6 Japan China’s gas consumption per U.K 2.9 person is only China 2.2 10% Brazil 1.5 0.5 India of the UK - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 tonnes of oil equivalent Gas consumption per person - TOEPY Russia 2.59 Just 4- 5% of China’s energy mix is provided by 2.12 U.S.A Natural Gas U.K 0.94 Government seeking to increase Natural Gas to Japan 0.80 over 10% of energy mix by 2020 Brazil 0.17 China 0.11 China is already the fastest growing gas market in the world 0.04 India - 0.50 1.00 1.50 2.00 2.50 3.00 tonnes of oil equivalent China Gas: Delivering a balanced and environmentally prudent energy supply
China’s Political Environment AIM TO ~US$0.9/Mcf ROBUST STABLE INCREASE NG GOVERNMENT DOMESTIC ENERGY USE TO 10% SUBSIDY FOR GAS PRICES POLICIES BY 2020 CBM China Gas: Delivering a balanced and environmentally prudent energy supply
China gas prices holding steady 160 140 120 100 US$/BBL 80 60 40 20 0 2006 2007 2008 2010 2011 2012 2014 2015 Brent GDG Values as of Dec 31 st year end (1) (2) Company realized price in US$/boe Source: Company Data, Bloomberg China Gas: Delivering a balanced and environmentally prudent energy supply
Green Dragon Gas Snapshot (LSE: GDG) Operating exclusively in China for 20 years 10 th year listed in London Leading independent CBM gas producer in China Focused on monetising production and sales in 2016 12.12Bcf exit rate in 2015 Strong relationships with leading NOCs 2037 $4.0bn Drilled Wells 2P Reserves China Gas: Delivering a balanced and environmentally prudent energy supply
2016 – Driving production capacity and cash flow 2015 2016 12 bcf* 16 bcf* 3.1 million homes 2.3 million homes *Production capacity China Gas: Delivering a balanced and environmentally prudent energy supply
Conclusion China Domestic gas addressing China gas a prices remain its energy good bet robust challenge China Gas: Delivering a balanced and environmentally prudent energy supply
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China’s leading independent gas producer “20 Years of CBM in China” www.greendragongas.com LSE: GDG.LN
Disclaimer This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any shares of Green Dragon Gas Ltd. (the “Company”) in any jurisdiction. The Company’s shares have not been and will not be registered under the US Securities Act of 1933 (the “Securities Act”) and may not be offered or sold within the United States absent registration under the Securities Act or an exemption from registration. The information contained in this presentation is given in good faith but no representation or warranty is made in relation to the accuracy or completeness of the information, or any oral information provided in connection therewith, or the data it generates and no responsibility, obligation or liability is or will be accepted by the Company or its affiliates or advisors or by any of their respective officers, employees or agents in relation to it. This presentation contains certain forward looking statements with respect to the financial condition, results, operations and businesses of the Company. The statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements and forecasts. Past performance is no guide to future performance and persons needing advice should consult an independent financial advisor. This presentation and the information contained in it are confidential and should not be distributed, published or reproduced, in whole or in part, or disclosed by recipients directly or indirectly to any other person. 12
GDG – a snapshot Focus on production and cash flow • Exceeded 2015 annual production capacity target of 12 bcf • Investment in infrastructure – converting production potential to sales • Monetising invested capital to enhance shareholder return • CNOOC significantly advancing infrastructure build on GSS in line with commitments • GCZ providing consistent cash flow following cost recovery by CNPC 2016 – a transformational year • Build on production success through additional well connections and infrastructure • Coal Seam 15 to compound reserve growth and production potential • Target 16 bcf gross annual production rate • Significant sales and production increases from existing wells “…Connections are everything…”
Leading China CBM independent Large reserves base • Largest publicly listed CBM reserves base in China: 1P: 173Bcf; 2P: 549Bcf; 3P: 2,379Bcf* 8 $4.0bn • Reserves independently verified by 10 consecutive CPRs • Six Inland Production Sharing Contracts covering 1,869,599 acres (7,566 km² ) Blocks 2P Reserves • Ongoing migration to 1P reserves: 17% increase at Yearend 2015 Integrated operations and strong partners • Strong, highly capitalised Chinese partners: CUCBM (CNOOC), CNPC and PetroChina • Proven PSC titles: Protected by Netherlands-PRC Bilateral Investment Treaty • Equity participation in over 2,000 wells Centrally located among China’s gas consumers • Multiple routes to monetise gas: GDG-owned refuelling stations, industrial customers, multiple gas pipelines, sales via electricity 2037 1.9mn Experienced leadership and strong corporate profile • Highly experienced operational management team with a track record in Coal Bed Methane Drilled Wells acres • High quality shareholder base: includes Aberdeen, Chandler Corp, Fidelity, Platinum Asset, GIC, Management *YE2015
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