Leyshon Resources, China National Petroleum Extend Exploration Time at China Gas Project

Leyshon Resources has reached an agreement with China National Petroleum Corp. (CNPC) to extend the exploration period at the Zijinshan production sharing contract at the Ordos Basin in Central China to the end of 2017.

The PSC is valid for 30 years and expires in 2038.

Leyshon, through its wholly owned subsidiary Pacific Asia Petroleum has embarked upon a $20 million accelerated exploration and appraisal program for the gas project, where Leyshon has a 100% interest in the exploration phase of the PSC.

CNPC has the right to back in to a 40% interest at the development stage.

The main objective of the 2013 work program, started ahead of schedule, is to define a resource sufficient to delineate a third party independent resource by the end of this year and to submit a Chinese Reserve Report by middle of next year.

The work program includes drilling up to six wells, conducting eight flow tests and acquiring 300 kilometres of 2D seismic data.

While three wells have been committed, the other three are subject to results from the first three wells and PSC partner agreement.

While the exploration extension application and other regulatory approvals are pending, exploration activities will continue as normal.

Leyshon had a cash balance of $45.77 million at the end of March 2013 quarter, giving its shares a cash backing of $0.183 a share against its current share price of $0.21.

(proactiveinvestors.com.au, Edited by Topco)