(MENAFN - ProactiveInvestors - Australia) Sino Gas & Energy (ASX: SEH) has been granted a trading halt pending a proposed corporate announcement related to a US100 million (A99.6 million) investment into the company.
The company had signed a letter of intent with an unnamed third party for the investment, which is aimed at progressing development of the Sanjiaobei and Linxing coal seam gas projects in China.
This will be achieved through the purchase of US10 million of existing shares in Sino and a guaranteed commitment to invest a further US90 million to secure a 51% interest in the company.
The Sanjiaobei and Linxing projects are located in Shanxi province in the Ordos Basin, the second largest onshore oil and gas producing basin in China and a key transcontinental gas transport hub.
The area has mature field developments with an established pipeline infrastructure to major markets.
Sino has defined an inventory of 3.7 trillion cubic feet of gas across the more than 3,500 square kilometres of acreage.
The company plans to complete 17 wells this year and start pilot production around mid-year.
A gas sales agreement will then be pursued with the aim of securing overall development plan approval for the Sanjiaobei project in the first half of 2013 and for Linxing Shallow in August 2013.
The halt will last until the earlier of an announcement being made to the market, or the opening or trade on Wednesday, June 27.