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March 19, 2012 /PRNewswire-Asia-FirstCall/ -- Recon Technology, Ltd (Nasdaq: RCON), a Chinese non-state-owned oil and gas automation services provider (the "Company"), announced today that one of its variable interest entities, Beijing BHD Petroleum Technology Co., Ltd. ("BHD"), introduced
Baker Hughes Frac-Point
TM System to China Petroleum and Chemical Corporation's ("Sinopec") Zhongyuan oilfield. The system helped Sinopec complete the fracturing of a dense sandstone horizontal well that required multistate fracturing. This cooperation positions BHD very well in meeting Sinopec's further fracturing needs. As of
March 19, 2012, BHD has signed several contracts with an accumulated contract value of
RMB 30 million (approximately
$4.75 million). These contracts will be performed in different stages and are expected to be completed during the first half of 2012.
"Our goal is to become a leading oilfield full-service provider by providing safe and efficient products and services to our oilfield clients," Mr. Chen Guangqiang, Recon's CTO, said, "Our clients' needs always guide our business development. With further exploration and development of oilfields, the level of reserved crude oil gradually decreases, as does the output. We believe fracturing technology is the most effective way to increase the output and economic benefits of increasingly depleted oilfields. Recon realized early on the importance of the horizontal multistage fracturing technology and established a professional task force to research and test its applicability in
China. Our team has engaged in substantial field work across
China and abroad to investigate the fracturing technology to meet our long-term clients' needs. We see these contracts as the result of this hard work."
"As a smaller company, our strategy is to be the leader of the very specialized oilfield service sector. We aim to improve our technological knowhow and to accumulate experience by cooperating with leading international companies to represent and promote their advanced products in
China," Mr. Chen continued, "Last year we qualified to develop the Frac-Point™ Completion System of Baker Hughes for Zhongyuan Oilfield, a subsidiary of Sinopec. The system is widely used around the world and has been installed in more than 2,200 oil-gas wells, 150 of which are located in
China. We assisted Zhongyuan Oilfield last year testing the system in one well and achieved outstanding results. In this case, after the installation of the system, output of oil increased to 6.2 times the previous level and gas production to 4.6 times the previous level. It is our honor to be among the select few domestic suppliers designated by Sinopec of the horizontal multistage fracturing technology. BHD and Sinopec have now signed contracts to provide this technology for ten wells in the Zhongyuan Oilfield."
Mr. Chen also stated, "The horizontal fracturing technology is prioritized in Sinopec's internal Twelfth Five-Year Plan. Sinopec plans to introduce the fracturing technology to 1,100 of its wells each year over at least the next 3 years. Based on an estimated average investment of
RMB 3 million per well, it is a tremendous market of
RMB 3.3 billion per year. We will seek to participate in this initiative to the greatest extent possible and improve our service experience, in order to promote this technology and increase our market share in Zhongyuan and other oilfields across
About Recon Technology, Ltd