Gulf Resources Announced the Assessment Results of Natural Gas Resources Under Its Bromine Well in Sichuan
May 07 2015 - 8:30AM
Gulf Resources, Inc. (Nasdaq:GURE) ("Gulf Resources" or the
"Company" or "GURE"), a leading manufacturer of bromine, crude salt
and specialty chemical products in China, today announced the
assessment results of natural gas resources under its bromine well
in Sichuan.
On January 30, 2015, the Company announced that it
had found natural gas resources under its bromine well in Sichuan.
The Company subsequently hired a third party (a subsidiary of
Sinopec) to conduct of survey of this well. According to the
report, the major results of the study are as follows:
- The well is located in the West Wing of Penglai South tectonic
fault zone.
- The geological horizon well depth is shallow.
- Based on drilling, testing, logging display, and perforation
test results, Penglai South structure has preferable natural gas
reservoir properties.
- The complexity analysis shows that this natural gas containing
total 93.1% of methane and ethane.
- This well should be able to have a trial production output of
52,186 cubic meters per day with 19.34MPa flowing pressure from
bottom well.
Based on the assessment report, the Company
estimates this well should produce annual revenue of approximately
US$4.7 million and annual net income approximately US$2.3 million
per year.
GURE intend to apply for permission to begin trial
production, which is expected to commence in the third quarter of
2015. GURE has already spent US$7.85 million and will spend another
US$2 million on this well before trial production commences.
After the trial production is completed, GURE
intends to apply for permission to drill approximately 10 more
wells. Before this permission is granted, the government will
consider the trial production results as well as the capabilities
and financial strength of the Company. However, because GURE is the
first company drilled well in this small county area after Chinese
National Petroleum Corporation (CNPC) discovered rich proven
geological natural gas reserves in Moxi block, it believes it has a
strong advantage to obtain permission. The cost of future wells
expected to be lower than the cost of the initial well.
There is no guarantee that GURE will receive
permission to drill these additional wells. Nor is there any
guarantee that future wells will produce the same result as the
original well. However, given the results of the study as well as
natural gas discoveries in neighboring areas, GURE is optimistic
about the opportunity.
This Sichuan area also has substantial bromine
resources. However because the natural gas opportunity is much
larger, GURE will initially focus on natural gas in Sichuan.
Gulf Resources' CEO, Xiaobin Liu stated, "We are
very excited to have found natural gas in addition to halogen water
under our existing well. We are also very excited that the content
of the gas is highly pure. The Company will work actively with the
local government and our consultant to start trial production,
apply for required permits for future wells, and commence natural
gas production."
"At the present time," Mr. Liu continued, "it is
impossible to quantify the total opportunity. There are always
uncertainties and the need for governmental approval. However,
given the shortage of natural gas in China and our strong advantage
in this small county area, we believe this could represent a
substantial business opportunity."
About Gulf Resources, Inc.
Gulf Resources, Inc. operates through two
wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company
Limited ("SCHC") and Shouguang Yuxin Chemical Industry Co., Limited
("SYCI"). The company believes that it is one of the largest
producers of bromine in China. Elemental Bromine is used to
manufacture a wide variety of compounds utilized in industry and
agriculture. Through SYCI, the company manufactures chemical
products utilized in a variety of applications, including oil and
gas field explorations and papermaking chemical agents. For more
information, visit www.gulfresourcesinc.com.
Forward-Looking Statements
Certain statements in this news release contain
forward-looking information about Gulf Resources and its
subsidiaries business and products within the meaning of Rule 175
under the Securities Act of 1933 and Rule 3b-6 under the Securities
Exchange Act of 1934, and are subject to the safe harbor created by
those rules. The actual results may differ materially depending on
a number of risk factors including, but not limited to, the general
economic and business conditions in the PRC, future product
development and production capabilities, shipments to end
customers, market acceptance of new and existing products,
additional competition from existing and new competitors for
bromine and other oilfield and power production chemicals, changes
in technology, the ability to make future bromine asset purchases,
and various other factors beyond its control. All forward-looking
statements are expressly qualified in their entirety by this
Cautionary Statement and the risks factors detailed in the
company's reports filed with the Securities and Exchange
Commission. Gulf Resources undertakes no duty to revise or update
any forward-looking statements to reflect events or circumstances
after the date of this release.
CONTACT: Gulf Resources, Inc.
Web: http://www.gulfresourcesinc.com
Director of Investor Relations
Helen Xu
beishengrong@vip.163.com
IR Manager
Max Ma
Max_VX@163.com
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