Sino Gas And Energy Holdings Limited (ASX:SEH) Well Testing Program Continues to Achieve Strong Results

Perth, July 27, 2011 AEST (ABN Newswire) - Sino Gas & Energy Holdings Limited (ASX:SEH), continues to realize the potential of its gas field with additional testing being performed on the TB08 well. Sino Gas has re-flowed one of the upper zones in the TB08 well that was fracture stimulated (frac) in late June 2011 and has confirmed a significant increase in gas flow.

As at 7:00am, 27 July 2011, the zone had been flowing gas for more than 24 hours. Currently the well is flowing at a stable gas rate of ~ 706,000 scf/day with a Tubing Head Pressure (THP) of 200 psi.

Sino Gas's Managing Director, Stephen Lyons said that the increased flow rate on TB08 was another example of the strong results being achieved on its testing program.

"The upper zone in TB08 flowed gas at ~ 300,000 scf/day at 140psi THP following the frac. Over the past 3 weeks as the well was 'shut-in' it appears as if the well has 'cleaned up' further resulting in the significant productivity increase which would normally be expected from a frac.

Sino Gas has a demonstrated track record of success in its flow testing program. Following the success of its TB07 well (gas flow rate of 2,900,000 scf/day) during 2010, Sino Gas has so far achieved significant commercial well rates on its TB09 well (gas flow rate of 1,150,500 scf/day), TB03 well (gas flow rate of 326,500 scf/day) and an indication of a gas flow on TB06 in excess of 1,000,000 scf/day.

The doubling of the gas flow rate on the upper fracced zone in TB08 represents another milestone in that program", said Mr Lyons.

Sino Gas will continue to flow the upper zone for a limited period and then move to test a lower potential gas pay zone in the TB08 well.

Substantial progress being made on the Seismic Program

Sino Gas is currently undertaking an extensive seismic acquisition program on its Sanjiaobei PSC which, in a success case, is expected to expand Sino Gas's potential reserve area from the current 70km2 to more than 400km2.

Since the report of last Thursday, 21 July 2011, BGP Seismic Corporation, Sino Gas's seismic contractor has completed the drilling of more than 8,000 shot points and has demobilized the drilling crew.

Almost 300 km of seismic lines have now been recorded with the remaining 30% of the work program expected to be completed within the next 2 weeks.

Sino Gas has also been reviewing the processed seismic to 'high grade' well locations and expects to be commencing its drilling program by the end of August 2011.

Contact

Stephen Lyons Managing Director Sino Gas and Energy Tel: +86-139-1148-1669 +86-10-6530-9260 Email: slyons@sinogasenergy.com Gavin Harper Chairman Sino Gas & Energy Email: gharper@sinogasenergy.com http://www.sinogasenergy.com