Dart Energy International Pte Ltd has entered into a Letter of Intent (LOI) with Henan CBM (HCBM) and Hong Kong Prosperous Clean Energy Company (HPEC). The LOI relates to the establishment of potential new foreign cooperation Production Sharing Contracts (PSCs) – up to four for coal bed methane at various blocks in Henan Province, China, and one for shale gas in Sichuan Province, China.

At the same time, Dart and HPEC have entered into a Memorandum of Understanding (MOU) setting out the key commercial terms for a collaboration between Dart and HPEC in relation to these potential PSCs and associated downstream activities.

HCBM is a Chinese state-owned enterprise and one of only four companies approved to enter into foreign co-operations PSCs for coal bed methane in China (the others being PetroChina, China United Coal Bed Methane, and Sinopec). 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.

Under the terms of the LOI, Dart, HCBM and HPEC will negotiate exclusively, and 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. Total area is up to 722 square miles (2,000 square kilometers). •One shale block located in Sichuan Province. Henan CBM was awarded this license in the first shale open-bidding round in China (which was open only to domestic Chinese entities). Total area is 787 square miles (2,038 square kilometers).

Tags: Dart Energy Limited