Edison Investment Research - G3 Exploration Limited (G3E) ODP submission: Green shoots

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Edison Investment Research

Sanjeev Bahl

ODP submission: Green shoots

2017 is likely to be a critical year for Green Dragon Gas (GDG) as management works to deliver on several milestones that will enable a step-up in activity levels. We were encouraged by the CNPC approval and submission of the GCZ CBM Block overall development plan (ODP) in April. Execution of supplementary agreements and GSS ODP submission would provide an incremental reserve base for GDG to leverage in order to refinance outstanding bonds and fund further drilling activity. With regard to funding GDG states that it has multiple term sheets for mezzanine and RBL funding on hand. Our base case valuation of 227p/share rises to 237p/share assuming GSS ODP approval this year and GCZ developed in-line with ODP, this is offset by a delay in GSS development relative to previous forecasts.

28/04/2017 7 EN

Underlying

G3 Exploration Limited

Green Dragon Gas is an investment holding company. Through its subsidiaries, Co. is engaged in the exploration, development and production of coal bed methane in the People's Republic of China (PRC). The coal bed methane operations in the PRC are conducted through production sharing arrangements with China United Coal Bed Methane Corporation Ltd. As of Dec 31 2012, Co. conducted its businesses through these segments: sales of coal bed methane gas; transportation; pipelined gas distribution; gas stations sales; gas filling equipment sales; and corporate. As of the same date, Co. had net proved reserves of 59.00 billion cubic feet of coal bed methane.

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KYG409381053 London Stock Exchange Hong Kong

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Sanjeev Bahl

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ODP submission: Green shoots

Bahamas Petroleum Company - Countdown has begun

G3 Exploration - Accelerated monetisation of production assets

Capital Network: G3 Exploration Limited - Operational update

Basilea Pharmaceutica - Cresemba milestone payments continue to roll in

AAC Clyde Space - Solid start to the year with further order growth

Tinexta - Typical seasonality in Q124

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