Hong Kong, October 12, 2010 - Oil and gas company Sino Oil and Gas Holdings Limited (“Sino Oil and Gas Holdings”, HKEx: 702) reports the discovery of a high-yield shallow gas reserve at Well 6-4 of its Liuluoyu oil field (柳洛峪油田) in Shaanxi Province (陝西), the PRC. The Group anticipates a significant increase in natural gas production from the Liuluoyu block in future.

In early October, the Group’s oil and gas team discovered a high-yield shallow gas reserve at Well 6-4. According to a preliminary test, the daily open flow of each gas well will be more than 10,000 cubic meters. Based on conservative estimates, the daily production of each well will not be less than 3,000 cubic meters upon stabilization of output.

Liuluoyu oil field is located in Ganquan County (甘泉縣), Shaanxi Province and has an area of 8.3 square kilometers. It currently has about 90 producing wells with production of about 5,000 tonnes of crude oil last year. It has never been explored for natural gas prior to the Group’s recent discovery. With an aim to enhance the efficiency of the block, the Group conducted a preliminary exploration at Liuluoyu for natural gas resources with discovery being made in early October. As estimated by oil and gas experts making reference to relevant data, Liuluoyu’s shallow natural gas reserve is in the depths of about 300-500 meters with an estimated recoverable reserve of about 500 million cubic meters. Investment for each single well will amount to approximately RMB400,000-500,000.

Sino Oil and Gas Holdings Executive Director Dr. Dai Xiaobing said: “The discovery of the shallow gas reserve at Liuluoyu will bring new earnings streams for the Group. We plan to invest about RMB25 million in establishing 50-60 shallow gas wells and complementary ground pipeline facilities at the block over the next two years. We aim to increase the natural gas production at Liuluoyu to 5,000 cubic meters in two years.”

Dr. Dai continued: “In addition to our exploration works at Liuluoyu and its surrounding blocks for shallow natural gas reserves, we are also investing into tight gas resources in the Ordos Basin. Future development efforts will be directed towards both oil and gas businesses, but our focus will be on the exploration of gas reserves. In particular, we will invest in exploration works for non-conventional natural gas.”

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.

Issued by :
Sino Oil and Gas Holdings Limited

Through :
t6.communications limited
Jenny Lee or Angus Ho
tel: 2511 8388 / fax: 2511 8238
email: enquiry@t6pr.com
URL : http://www.t6pr.com