Sino Gas and Energy Holdings Limited (ASX:SEH) Drilling Program Completed With Another Gas Discovery Well

Perth, Dec 1, 2010 AEST (ABN Newswire) - Sino Gas & Energy Holdings Limited (ASX:SEH) has drilled to Total Depth (TD), completed the electronic logging of its TB09 well and confirms the presence of gas in 4 prospective zones.

Sino Gas is conducting its 2010 work program to gather the data for a reserves upgrade and to move towards commercializing it gas assets.

Commenting on the Company's drilling program, Sino Gas Managing Director, Stephen Lyons said, "In the past quarter Sino Gas has drilled its TB08, SJB03 and now its TB09 gas discovery wells.

These wells were completed on budget and in particular the drilling performance on the SJB03 and TB09 wells has been very pleasing.

In drilling its wells, Sino Gas has used two turn-key contractors, Bohai Drilling Engineering Company Ltd (BDEC) and Zhongyuan Petroleum Exploration Bureau (ZPEB). Sino Gas has been satisfied with the drilling and safety performance of both contractors and both are viable options for further drilling in 2011.

The field work has also been well managed and controlled by Sino Gas".

The TB08, SJB03 and now the TB09 wells have multiple prospective pay zones and leave Sino Gas with a number of flow testing options in its forward well testing program.

Sino Gas is currently working with its flow testing contractor CCDC Downhole Technical & Operations Company (CCDC) to define and implement the testing program for these wells.

Sino Gas is currently mobilising CCDC to conduct a perforation and Drill Stem Test (DST) on one zone on the TB08 well. This work will be carried out to measure formation flow and pressure data. Weather conditions permitting, additional zones in TB08 or the other new wells TB09 and SJB03 will be tested.

Sino Gas is also now completing the analysis of its TB04 flow test and is working to re-establish gas flow from the previously tested TB02 well to determine its suitability to contribute to the Pilot program.

Sino Gas continues to finalise the technical designs for its Pilot Development program, in particular working with Compressed Natural Gas (CNG) facility providers to define the specific implementation steps to commission the Pilot facilities.

The 2010 Reserves Upgrade program has been well designed, well implemented and represents a significant step towards commercializing the Company's gas assets.

TB09 well - multiple prospective zones encountered On Sino Gas's Linxing Production Sharing Contract (PSC), the TB08 and TB09 wells were designed as 'step out' wells and are in close proximity to the very successful TB07 well that flowed at an estimated rate of 2,900,000 scf/day from a single zone, significantly in excess of Sino Gas's commerciality determination.

The TB09 well was drilled to TD of 2,150 meters in 25 days. The well was then logged with Sino Gas taking 45 side wall samples for further analysis. Based on the encouraging logging results Sino Gas is now setting 5 1/2 inch production casing. This casing will allow multiple flow tests to be carried out in future operations.

Extensive flow testing operations continue

As part of preparing for the Company's Pilot program Sino Gas is currently mobilising CCDC to conduct a flow test on the TB08 gas discovery well.

Sino Gas is also conducting a "workover" of its TB02 well on its Sanjiaobei PSC. CCDC have now mobilised their workover rig and associated personnel to the TB02 well site with the workover procedure underway.

The TB02 well was first fracture tested in 2007 in two zones and produced gas at a combined rate of 400,000 scf/day.

In the current operation CCDC first performed wireline retrieval of the down hole tubing plug, ran and set down hole pressure recording gauges into the well, and then proceeded to flow back the previously perforated upper test zone from the well.

The testing procedure has seen a variety of different choke settings being used in order to lift the wellbore "kill fluid" used by Sino Gas in 2007 to suspend the well. The gas rate and Tubing Head Pressure (THP) continues to vary as the choke settings are amended.

Forward operations are to conduct a pressure build up test. Following this the down hole pressure gauges will be retrieved to confirm the down hole flowing and static pressure conditions and a determination made of the well's potential to contribute to the Pilot program.

Australian roadshow commencing 6 December 2010

Sino Gas will be conducting an investor and shareholder roadshow from next Monday 6th December 2010 in Australia. The roadshow material will be lodged with the ASX at that time.

Contact

Stephen Lyons Managing Director Sino Gas & Energy Tel; +86-139-1148-1669 +86-10-6530-9260 Email: slyons@sinogasenergy.com Gavin Harper Executive Director Sino Gas & Energy Email: gharper@sinogasenergy.com Sam Snyder Non Executive Chairman Sino Gas & Energy Email: ssnyder@sinogasenergy.com http://www.sinogasenergy.com