Oil Field Project Investment in China


May 16, 2013

TGER exploits new Oil Field in Jilin.

The project company (TGER) intends to acquire the 50% interest in the reserves of four blocks located in Jilin province, and start a Joint Venture with Petro China. The deal structure proposed is for the Equity Partner to receive 45% of the 50% and TGER will receive 5% of the 50% of the Proved Reserves (3,379,000 bbls). The acquisition involves purchasing proved producing reserves with a development plan of hydrojetting 35 wells with 3 zones in each well. This technology was applied to 6 wells in another part of the Jilin Oilfield with a 3 fold increase in production from one zone.

Key Points

Investment – $52 million;
Payout – 3.2 years;
ROR – 24%;
Current Production – 450 bbls/day;
Oil Buyer – PetroChina Company;
Superior management of existing production;
More industry experience from US professionals;

This project is a yield risk not a capital risk due to the significant portion of proved producing reserves being used to secure the asset.


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