Sino Oil and Gas Holdings Limited Net Profit of the First Half of 2015 Surged More Than 130% - Revenue from CBM Continued to Raise; Group's Business Shows Stable Growth Momentum

For Immediate Release

Sino Oil and Gas Holdings Limited

Net Profit of the First Half of 2015 Surged More Than 130%Revenue from CBM Continued to Raise; Group's Business Shows Stable Growth Momentum

Business Overview Hong Kong, 23 August 2015 - Leading oil and gas explorer and developer Sino Oil and Gas Holdings Limited (the "Company", Hong Kong stock code:702) today announced the unaudited interim results of the Company and its subsidiaries (collectively the "Group") for the six months ended 30 June 2015. During the period, the Group recorded a net profit of approximately HK$13,876,000 (2014 interim: approximately HK$5,905,000), which has been significantly increased by approximately 135% compared to the same period last year.

The other revenue generated from the trial sales of coalbed methane("CBM") has increased by approximately 49%, amounting to approximately HK$42,268,000 (2014 interim: approximately HK$28,352,000), mainly attributed to the infrastructure of Sanjiao CBM project completed, including the CBM processing station and related sales pipelines, leading to the increase of CBM sales-to-production ratio, as well as the CBM price for industrial users raised by 13.9% compared to the same period last year. Following the trial sales of CBM further elevated, the project has already become one of the major source of the Group's revenue composition.

During the period, the Group's further enhanced the internal cost controls, thereby the administrative expenses have been successfully reduced by approximately 15.7%. Turnover for the first half amounted to approximately HK$5,963,000 (2014 interim: approximately HK$8,516,000), which only included the results from oil exploitation operations in Liuluoyu, Yanjiawan and Jinzhuang oil fields in Shaanxi Province.

Sanjiao CBM Project Through its wholly-owned subsidiary Orion Energy International Inc. ("Orion"), the Group entered into a production sharing contract ("PSC") with China National Petroleum Corporation ("PetroChina"), its partner in the PRC, for exploration, utilization and production of the CBM field in the Sanjiao block, located in the Ordos Basin in Shanxi and Shaanxi provinces. The Group has a 70% interest in the PSC.

During the period, the Sanjiao project recorded CBM production of approximately 27.9 million cubic meters (2014 interim: approximately 22.93 million cubic meters) and CBM sales of approximately 27.38 million cubic meters (2014 interim: approximately 20.53 million cubic meters), resulting in a gas sale-to-production rate of approximately 98.1% (2014 interim: approximately 89.5%). In terms of the composition of gas sales throughout this period, industrial piped CBM sales accounted for approximately 89.7% of total sales (2014 interim: approximately 89.7%), while residential piped CBM sales contributed approximately 10.3% (2014 interim: approximately 10.1%). Total piped CBM sales accounted for nearly 100% of total gas sales during the period (2014 interim: approximately 99.8%).

At the end of 30 June 2015, the Sanjiao CBM project has completed a total of 73 wells, comprising 40 multilateral horizontal wells and 33 vertical wells. Out of the total 73 wells, 65 wells were in the normal dewatering stage, of which 55 wells had access to a gas collection pipeline network.

In August 2012, China National Development and Reform Commission ("NDRC") - National Energy Administration ("NEA") granted a reply to the application of a submitted overall development plan ("ODP") for the development of the Sanjiao CBM project. It is an important milestone for the project to enter into commercial production process. The Group has completed all necessary assessment reports and granted all required governmental approvals. It is expected that the final approval of ODP is going to be granted in the near future.

Dr Dai Xiaobing, Chairman of Sino Oil and Gas Holdings ("Dr Dai") said: "Upon the ODP approval, the Group will officially commence the construction with the annual CBM production capacity of 500 million m³, which includes, but not limited to large-scale drilling, expansion of central processing station, laying and improving gas gathering pipelines as well as entering into new sales agreements."

Crude Oil Business In order to be well prepared for the rapid development of CBM business, the Group has optimised its resources allocation to focus on the development of Sanjiao CBM project in recent years. The crude oil business development is relatively slower. For the period ended 30 June 2015, three oilfields in Liuluoyu, Yanjiawan and Jinzhuang, located at the Ordos Basin in Shaanxi Province, yielded an aggregate crude oil output of approximately 1,900 tonnes (2014 interim: approximately 2,400 tonnes). Meanwhile, for balancing the development of the business portfolio of gas and oil, the Group actively expands its overseas upstream businesses. The Group hence entered into two non-legally-binding memorandums of understanding ("MOU") in June and September 2014. The acquisition target is an oilfield located in Alberta, Canada. The Group is now conducting due diligence review on the resources and financial aspect of the Target Groups, as well as taking a comprehensive and in-depth evaluation towards these resources to ensure the project acquisition is in the best interests of the Group and its shareholders as a whole.

For the potential acquisition, Dr Dai said, "Currently, the international oil price dropped with the trend of continuous decline, it has provided the oil and gas companies with a good opportunities of overseas acquisition which leads to a new oil and gas mergers and acquisitions wave. The Group will also seek for merger and acquisition opportunities of high-quality oil and gas resources globally, balance the development of oil and gas business portfolio, strengthen the overseas business plan and thus steadily put forward the international development process."

Prospects Regarding the Group's future development, Dr Dai said: "The Group will continue to focus on gas and oil exploration and development, building the core competitiveness, optimising resource distribution and enhancing business return. The Group strives to become a professional international oil and gas explorer and developer and is committed to provide all shareholders with fruitful returns. "

For further enquiries, please contact: Celia Li Corporate Communication Department Phone：(852) 2802 3623 Email：celiali@sino-oilgas.hk

About Sino Oil and Gas Holdings Sino Oil and Gas Holdings Limited is a leading oil and gas developer and explorer. The Group is principally engaged in natural gas and oil exploration and extraction with a focus on unconventional gas -- Coal Bed Methane ("CBM"). Sanjiao CBM project is the Group's core business and the Group will conditionally and strategically extends its business to midstream and downstream. On this basis, the Group will balance the development of its gas and oil business portfolio, strengthen the overseas business plan and seek for merge and acquisition opportunities of high-quality oil and gas resources globally. For more information, please visit http://www.sino-oilgas.hk/.