Sino Gas & Energy Holdings has reported an increase in reserves and resources for its production sharing contracts in China.
New estimates by Perth-based consultancy RISC have lifted total project 2P reserves for the Ordos Basin by 168 per cent to 877 billion cubic.
This follows the commencement of the field development process, progress on government approvals, and results from a drilling program.
Total project 2C contingent resources have increased by 10 per cent to 2.5 trillion cubic feet, while total project P50 prospective resources increased by 64 per cent to 5.2 tcf.
RISC's valuation of Sino Gas' share of the project's 'expected monetary value' has increased by 51 per cent to US$2.4 billion.
Managing director Robert Bearden said RISC was requested to undertake the assessment due to the significant amount of work completed this year.
"Over US$550 million in net present value has already been assigned to Sino Gas for the Reserves booked to date and we look forward to continuing the reserve maturation process to drive future project value."
Ordos Basin is China's second largest onshore oil and gas producing area spanning 3,000 kilometres.
According to Sino Gas, more wells were scheduled in the project this year than in the past seven years combined.
Sino Gas shares were unchanged at 21.5 cents in afternoon trade. However they have doubled in value over the past four months.
In a research note, broking firm Argonaut, which is an adviser to Sino, talked up the new estimates, and put a price target of 49 cents on Sino's shares.
"In the context of the short time period (6 months) since the last upgrade, this is an outstanding result," Argonaut said.
"The company has flagged an additional update in Q1 2014, which should incorporate further drilling results and, potentially, a second gas sales agreement.
"Focus will soon start to shift from reserve / resource growth to project delivery, which is moving forward at an impressive rate."
Argonaut was lead manager to a $10.1 million institutional placement last December, priced at 12.25 cents per share.
