Leyshon Energy Limited Expansion Of The Interim Testing Programme (5587I)

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RNS Number : 5587I

Leyshon Energy Limited

02 June 2014

2 June 2014

Expansion Of The Interim Testing Programme

Leyshon Energy Limited (AIM:LEN) is pleased to provide the following update on the Company's activities.

Zijinshan Gas Project

Expansion of the Interim Testing Programme

As previously announced the Company has recently reached an agreement with its partner, which remains subject to the finalization of documentation, whereby it will undertake an interim testing programme on the Zijinshan project before making a decision whether to commit to the main exploration and appraisal programme.

Further to more detailed analysis, including the review of offset data, it has been decided to increase the number of flow tests to test a minimum of three zones within Well ZJS7 rather than a single zone as previously planned.

Depending on favourable results from the programme it is planned to drill and flow test a further well, ZJS8, in a location in the northern part of the license area. The programme is expected to commence shortly and will be completed by the end of October this year at an estimated cost of up to US$4 million excluding overhead and supervision costs.

Strengthening of the Technical Team

Further to the appointment of the highly experienced Tony Meggs as Executive Director the technical team continues to be strengthened with the appointments of Frank Fan as Operations manager and Lyn Liu as Reservoir Engineer.

As previously advised Tony has more than 30 years of experience in the oil and gas industry. Most recently he served as an Executive Vice-President for Talisman Energy, and prior to this was a Group Vice President of BP, where he served as the Head of Group Technology until April 2008.

Frank Fan has extensive operations experience with CNPC and was most recently in charge of an operation with eleven production rigs. Lyn is an experienced Reservoir Engineer having most recently worked for international consultancy Tiandi Energy and prior to that for CNPC.

Frank and Lyn and support staff join Ruby Wang who is a very experienced in oil and gas geologist having gained extensive experience with Anadarko and Sinopec in China.

The Company has commenced the recruitment of a senior Chief Operations Officer to replace Frank Fu who has left the Company to assume a more senior role with his previous employer.

The expanded technical team is now working closely with Haliburton Energy Services'shighly regarded Beijing based Unconventional Technical Team which has extensive experience in China.

Main Exploration and Appraisal Programme

The US$17 million main programme is an exploration and appraisal programme which comprises drilling, fracking and flow testing with the remainder of the costs covering PSC maintenance and geological costs and collection of additional seismic data some of which may be 3D.

The programme, which may well be modified to reflect results, is designed to upgrade the existing resources such that a Chinese Reserve Report can be obtained.

Acquisition of Oil and Gas Assets in China

As previously advised the Company has been actively pursuing a number of acquisition and investment opportunities in the oil and gas sector in China.

There are a number of divestment processes underway for assets in the region for which the Company has made significant progress in advancing its interest in the normal course of business. A number of these discussions are in hand. There is no indication whether this will lead to a commercially binding transaction.

Chairman John Manzoni commented: "We welcome the new members of the team and the support of Haliburton and the other consultants in the execution of this important interim testing programme. We look forward to keeping shareholders fully informed of results as they come to hand."

For further information please contact:

Leyshon Energy Limited

Peter Niu Company Secretary

Tel: + 86 10 8444 2882

[e-mail]

Cantor Fitzgerald Europe

David Porter/Rick Thompson (Nominated Adviser)

Richard Redmayne (Corporate broking)

Tel: [phone]

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This information is provided by RNS

The company news service from the London Stock Exchange

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