Leyshon Energy Limited Chairman's Address For Annual General Meeting (3518J)
12 Junho 2014 - 6:00AM
UK Regulatory
TIDMLEN
RNS Number : 3518J
Leyshon Energy Limited
12 June 2014
12 June 2014
Chairman's Address For Annual General Meeting
It gives me great pleasure to report to Shareholders on the
progress the Company has made since the successful demerger and the
Admission to AIM in January of this year.
Firstly let me say that the starting point for any young Company
is its management and in that regard I believe we are building a
great team.
The experience of the Board I think speaks for itself, and it's
a great pleasure for me to be working with my fellow Directors who
bring a wealth of experience in the oil and gas business, which
complements the expertise of the team in China
We are pleased that Tony Meggs has agreed to join us as an
Executive Director. He is in Beijing every month and more recently
has been on site in Shanxi. Under his guidance we continue to
strengthen the technical team and we will be looking to make
further appointments in due course.
Secondly our strategy is China. China is short of energy. It is
increasingly dependent on imports for both gas and oil and is under
intense environmental pressure to reduce its reliance on coal.
As you will hear from Paul, we believe that the policy response
means that China is now entering a Golden Age of Gas - and is
seeking to increase its consumption of gas from all sources.
In addition we identified early on the reforms which will
provide us with the opportunities to participate in this exciting
investment phase of China's energy development.
These reforms are best characterized by Premier Li Ke Qiang's
encouraging statements on mixed ownership, both private and
foreign, which is resulting in the progressive opening up of the
state owned Energy sector.
I am pleased to say that we have positioned ourselves on the
front line of these reforms and have already been offered
opportunities to work with the major state owned energy Companies
CNOOC, Sinopec and of course we already have a close co-operation
with CNPC on our Zijinshan gas project in the Ordos Basin.
These reforms are now being implemented at an increasing pace
and we are witnessing rising gas prices, additional financial
incentives to invest in unconventional gas and more clarity in the
underlying regulatory framework. All of which are encouraging for
future investment in the sector.
Zijinshan Gas Project
After a detailed review of the three well programme which
completed last year an agreement has been reached with our partner
to undertake the previously announced Interim Testing Programme at
a cost of US$4 million, before committing to the main US$17 million
programme.
The main focus of the Interim Testing Programme is the flow
testing of well ZJS7 and the drilling and testing of the fourth
well ZJS8, which is to be located in the northern part of the
licence. Paul Atherley will discuss this in more detail in his
presentation a little later.
The Zijinshan project has a lot of potential. Our resource
consultants RISC have reported that the project has a best estimate
prospective resource of over 1 tcf gas.
We have excellent PSC terms under which we hold a minimum 60%
interest, a pipeline with local tie-in points straddles the project
and there is very strong local demand with rising gas prices.
Our appraisal program will help us confirm the productive
capacity of the licence, and if we can demonstrate to ourselves
that it is commercial, I am confident we can fund and develop the
project.
Acquisitions
As we have stated publicly - we are actively looking for
acquisition opportunities in China to grow the company, and I am
delighted that we have received very strong indications of
financial support should we find the right opportunity.
There are a number of divestment processes underway currently,
and we have been in a number of conversations to assess whether the
assets in question would fit our criteria.
While there are several discussions active today, there is no
indication that they will lead to a commercially binding
transaction.
Our Objective
Whilst our strategy is clear, we want to invest in China's
energy future, we need the right team to achieve this. I have
referred to the steps we have taken to build both the Board and the
executive team, and I am confident we have the right blend of
skills to be successful.
What we bring to China is investment capital, technical
expertise and a professional approach to our business. We have
implemented policies on Health, Safety and Environment and put
procedures in place to deal with potential corrupt practices.
The team on the ground in China has excellent government and
corporate relationships which they have established and built over
nearly a decade in China.
It is this combination of an experienced Board and management
team, with very strong relationships in China which is the key to
our future success.
Our objective is to build the Company's business through both
development and acquisition, and I believe we have some exciting
opportunities in our sights.
Each of the resolutions being put to shareholders today is
firmly in line with these objectives and we encourage you to
support them.
These are exciting times for a young Company and I very much
look forward to keeping you regularly updated on our progress
throughout the year.
John Manzoni
Chairman
London 12 June 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
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