Yanchang Petroleum International ("Yanchang Petroleum International" or the "Company") engages in both the Upstream and Downstream sectors of the Oil and Gas Industry. Upstream, its activities include Exploration, Development and Exploitation of Oil and Gas fields; Downstream, its activities include fuel oil trading and distribution.
Overseas Expansion and Flagship of Yanchang Petroleum Group
Yanchang Petroleum International is an important platform to develop the overseas business of Yanchang Petroleum Group, the majority shareholder of the Company. Yanchang Petroleum Group is among the top four state-owned Oil and Gas Enterprises in China, which ranked No. 326 in Fortune Global 500 in 2017. With the support of its majority shareholder, the Company pursues acquisition opportunities in stable regions of the world and strives to become a mid-size international nergy company.
The Company has established a foothold in the North American Oil and Gas market through its wholly owned subsidiary Novus Energy Inc., (“Novus”), a Canadian company which produces oil and gas in Saskatchewan and Alberta.
Novus’s Oil and Gas Production Business: Novus engages in acquiring, exploring, developing and producing crude oil and natural gas in Saskatchewan and Alberta. Novus produces high netback, light sweet crude oil by horizontal wells; it has drilled in excess of 360 horizontal oil wells in the geological formation known as Viking since its incorporation in 2009. Novus currently owns in excess of 160,000 net acres of land. From August to October 2017, Novus brought to production 3 of the top 15 producing wells drilled in the Viking formation.
The core of Novus Oil and Gas portfolio is located in the Greater Dodsland area of Southwest Saskatchewan. Novus' assets have great potential for further developments. They are a concrete foundation which the Company leverages to accelerate its international expansion.
Yanchang Petroleum International holds a 70% equity interest in Henan Yanchang Petroleum Sales Co Ltd (“Henan Yanchang”), which principally engages in wholesale, retail, storage and transportation of refined oil products in China.
Henan Yanchang’s Refined Oil Business: Henan Yanchang owns land parcels of 209 mu in aggregate, 120,000 cubic meter of storage tank capacity and a railway line of 2,500 meter. Henan Yanchang has a license to distribute and sell refined oil products at an annual capacity of more than 2 million ton. The sale policy of “cash before delivery” is strictly implemented so that receivables recovery stands at 100%.
The Company aims to become a mid-size international oil and gas company and targets to reach an average production of 70,000 BOEPD in the coming five years.
To achieve this goal, the Company will fully leverage the technical and financial strength of its major shareholder, and will pursue the financing options available to a listed Company.
The relative stability of the oil price over the past year gives rise to a number of acquisition opportunities that the Company is pursuing diligently. The key to success and sound financial performance is to continue to deploy technological and operational efficiency enhancement measures, while maintaining a prudent operatorship approach.