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Daan Project

Daan Project is located in Songliao Basin which in the city of DaanJilin Province, China, with a contract area of 62,518 acres. Gobi Energy, a wholly-owned subsidiary of MIE, is now a foreign contractor (owns 90% of the foreign contractor interest) and the operator of Daan PSC.

Daan Project started the commercial production in 2005 and signed a PSA with PetroChina with a production period of 20 years and a maximum contract period of 30 years. As of the end of 2017, the cumulative oil output of the oilfield was 64.55 million barrels. In 2017, the average daily oil output was 12,137 barrels/day, and the total number of wells reached 2,362; During this period, the output reached 6.8 million barrels in 2012, the highest annual output in history. Daan Project is the largest domestic foreign cooperation project for offshore oil product sharing.

The 2P original petroleum geological reserves of Daan Project were 1.27 billion barrels. According to the reserve report of Ryder Scott at the end of 2016, the remaining recoverable reserves of 2P owned by MIE were 14.6 million barrels. Daan Project also achieved good results by the technology of network fracturing and sidetrack horizontal well through old wells, which can improve the effect of the development of remaining reserves and resources. With its complete infrastructure, experienced operating team and excellent HSE records, Daan Project has developed into the most mature core project of the Group.

South China Sea PY10-4 Project

South China Sea PY10-4 block is located in the middle of the Pearl River Mouth Basin with an area of 16,700 acres. The PSC contract of the block was engaged between PetroBroad Copower Limited (“PetroBroad”) and China National Offshore Oil Corporation in July 2013, which will be valid for 30 years. MIE acquired 34% of the equity interest of PetroBroad on May 25, 2016.

South China Sea PY10-4 Project is located in the South China Sea Basin, which has a very rich resource potential. At the same time, driven by the Belt and Road and the South China Sea Strategy, the government attaches great importance to the development of oil and gas resources in the South China Sea. The exploratory well of the project has tested to obtain a high-yield oil flow of 4,086 barrels per day, which is rarely seen in China. It has proved that a high-quality, high-yield oil field has been discovered. The recoverable resources of 3C amount to 15.7 million barrels, with an estimated average annual oil production peaking over 5,315 barrels/day.

The similar oilfield structure has been found in the western PY10-4W trap of this project, which has the potential for further exploration and development. The cooperative relationship with the world-class oil company CNOOC will be established through this project, which will help seek other opportunities.