HONG KONG - Oil and gas company Genesis Energy Holdings Ltd. (to be renamed Sino Oil and Gas Holdings Ltd.) has signed a an acquisition agreement with an independent third party for coalbed methane (CBM) company Orion Energy International Inc.

Orion is engaged CBM exploration, exploitation and production in the Shanxi-Shaanxi-Henan Triangle, the PRC.

Total payment is anticipated to be roughly US$350 million (approximately HK$2.72 billion), which will be settled by way of cash and the issue of new shares in the company. As a pre-requisite, the project company is required to submit a qualified and authoritative valuation report verifying its CBM reserve of not less than 200 billion cubic feet.

Genesis Energy executive director Dr. Dai Xiaobing noted: "Upon completion of the fund raising exercise, the Group holds cash in hand of close to HK$400 million with no gearing. This enables us to explore and negotiate acquisition opportunities with promising investment potential. CBM will be the focus of our future investments.”

China is rich in CBM resources. According to the latest national CBM study, China has total CBM geological resources of approximately 36.81 trillion cubic metres. As a way to help meet the growing energy demand in China, the government has introduced a series of tax incentives and financial subsidies to encourage CBM exploration.