The letter of intent (LOI) for potential PSCs is for four coal bed methane at various blocks in Henan Province, China, and one for shale gas in Sichuan Province, China.
The parties will seek relevant Government approvals for foreign cooperation PSCs in relation to some unconventional gas assets currently held by HCBM, being four CBMs block located in Henan Province covering a total area of 2,000 km2.
Dart will immediately commence a technical evaluation of the various areas, and associated due diligence.
Following technical evaluation, the parties will negotiate exclusively and seek to agree foreign cooperation PSCs in respect of any one or more areas within six months.
Work program commitments will be as negotiated and set out in the PSCs.
The parties intend for the PSCs to be approved in the fourth quarter of 2012 for beginning the first phase exploration activities before the end of 2012.
Dart and HPEC will also establish a separate consortium to build, own and operate associated downstream assets that will provide a market for produced gas, including one CNG mother station and five CNG gas stations in Henan Province.
HCBM is a Chinese state-owned enterprise and HPEC is a substantial privately-owned company which primarily focuses on clean energy in Henan Province including operation of LPG & CNG gas stations and other natural gas facilities.
