Hong Kong, August 24, 2010 - Oil and gas company Sino Oil and Gas Holdings Limited (“Sino Oil and Gas Holdings”, formerly ‘Genesis Energy Holdings Limited’, HKEx: 702) today announced that during the six months ended 30 June 2010, the Group recorded a slight increase of turnover of HK$9.8 million (2009: HK$9.5 million) and a loss from operations of HK$33.1 million (2009: Profit of HK$0.3 million). The Group did not declare an interim dividend.

Sino Oil and Gas Holdings Executive Director Dr. Dai Xiaobing said: “We are delighted to announce a series of exciting events which took place in the first half of 2010. These events have not only brought positive momentum to the ongoing development, but also helped to shape the Group’s long-term future. We will continue to identify high-quality oil and gas acquisition targets in the Erdos Basin, and aim to attain a more efficient operational scale as the various acquisitions are completed. The commencements of the new projects will support the Group’s long-term profitability.”

Since 2007, the Group has acquired four oil and gas assets in the United States and China, thereby accumulating a degree of industry experience. During this period, the Group has continued to strengthen its management and expert teams, and has actively invited the participation of operators and investors with a strong energy industry background. The Group aims to become one of the leading non-state-owned enterprises listed in Hong Kong with its focus on oil and gas businesses in China.

The Group is actively pursuing business opportunities in respect of CBM exploration in the Erdos Basin between Shanxi and Shaanxi Provinces in China, as a means to mitigate the fluctuations in the price of oil and to expand the Group’s revenue base. On 16 July 2010, the Group entered into a sales and purchase agreement for participation in a CBM exploration, exploitation and production project in the Erdos Basin through the acquisition of Orion Energy International Inc. (“Orion”). Through a production sharing contract between Orion and the Chinese partner, PetroChina Company Limited, it enjoys exclusive exploitation rights with a term of 30 years to the CBM field. It has a 70% interest in the economic benefits of the sharing contract. Total CBM reserves in the Sanjiao Block are estimated to exceed 1.3 trillion cubic feet. The acquisition of Orion is expected to bring significant and stable incomes for the Group upon its scheduled completion by the second half of this year.

Dr. Dai added: “In the past, CBM resources have not been utilized during exploitation owing to technical and budgetary limitations. The uncontrolled release of CBM can easily cause explosions and is damaging to the ozone layer. The exploitation of CBM will help fulfill China’s requirement for clean energy, while addressing the safety and environmental issues in relation to coalmine exploitation. The central and local governments have therefore introduced incentive policies to encourage the development of CBM extraction. Such policies include subsidies on CBM produced. Orion possesses advanced CBM production technologies and experience to tackle the difficulties involved.”

The Group continues to expand its oil and gas businesses in the Erdos Basin to complement the CBM project. On 26 July 2010, the Group signed a memorandum of understanding for the acquisition of a 90% economic interest in a production sharing contract for an oil field in Jinzhuang District, Ganquan County, Shaanxi Province (“Jinzhuang Oilfield”) at a consideration of not exceeding HK$500 million. Jinzhuang Oilfield is close to the Liuluoyu Oilfield (also located in the Erdos Basin) which the Group acquired in early 2009. According to a preliminary valuation, the project is estimated to have reserves of more than 25 million tonnes. Furthermore, the zone is found to be surrounded by tight gas reservoirs. The acquisition will aid our plan to integrate our oil and gas businesses in the area in order to achieve an operational scale with greater efficiency and synergistic benefits.

The Group maintains a solid balance sheet with a gearing ratio of 0% (2009: 0%) based on total assets, and a current ratio of 7.2 (2009: 0.8), placing the Group in a strong financial position to take advantage of new attractive investment opportunities that may arise.

Financial Highlights

	Six months ended 30 June
	2010	2009
	RMB '000	RMB '000
Turnover – Oil exploitation	9,779	9,552
Gross Profit	2,773	4,899
(Loss)/Profit for the period	(33,122)	277
Basic (loss)/earnings per share	HK(0.674) cent	HK0.0064 cent

About Sino Oil and Gas
Sino Oil and Gas Holdings Limited (HKEx: 702) is an energy company with a key focus on oil and gas. The Group is committed to building a portfolio of oil and gas assets and operations with an aim to develop into one of the leading independent oil and gas companies in Greater China. The Group currently operates oil and gas fields in the PRC and the US.

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Sino Oil and Gas Holdings Limited

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