Press Release
 

Independent Evaluator Completed Reserve Report for

Evaluated Zones of Kyrgyzstan Project

(21 July 2015, Hong Kong) - China Huarong Energy Company Limited ("Huarong Energy", the "Company" or "We", and together with its subsidiaries, the "Group"; stock code: 01101.HK) is pleased to announce that, APEX Reservoir Service, Inc., an independent competent evaluator (the "Independent Evaluator"), has issued a petroleum reserve report dated 20 July 2015 (the "Reserve Report") for the three oilfield zones in the Kyrgyzstan Oilfield Project. The board of directors of the Company is pleased and encouraged by the results and considers that the Reserve Report supports the view of the Group that the evaluated zones have favourable development potential and value. The huge recoverable reserve of those evaluated zones enables us to achieve economies of scale and greater return with reasonable development cost, and create greater value for our shareholders.

The Reserve Report was performed and prepared in accordance with the Petroleum Resources Management System ("PRMS"), a set of internationally recognised standards and guidelines. With a base date of evaluation of 31 May 2015 (the "Base Date of Evaluation"), the Reserve Report covered three oilfield zones (namely, Maili-Su IV, Eastern Izbaskent and Izbaskent) (the "Evaluated Zones") in the Kyrgyzstan Project. Its findings include:

1) as at the Base Date of Evaluation, the proved (1P) recoverable reserves of the Evaluated Zones in the Kyrgyzstan Project were approximately 24.39 million tons, whereas the proved plus probable (2P) recoverable reserves were approximately 50.54 million tons. The reserves were composed mainly of light crude oil.

2) as at the Base Date of Evaluation, the proved (1P) geological reserves of the Evaluated Zones in the Kyrgyzstan Project were approximately 144.46 million tons, whereas the proved plus probable (2P) geological reserves were approximately 194.48 million tons. The reserves were composed mainly of light crude oil.

3) as at the Base Date of Evaluation, the post-tax net present value of the petroleum reserves of the Evaluated Zones (calculated with an annual discount rate of 10%) shared by КыргызжерНефтегаз ("Kyrgyzjer Neftegaz" Limited Liability Company*) (the "Project Company"), which is an indirect subsidiary that is 60% owned by the Company, was approximately USD1.925 billion.

The Reserve Report supports the view of the Group that the evaluated zones have favourable development potential and value. Plus, the remaining two oilfield zones (namely, Changyrtash and Chigirchik) of the Kyrgyzstan Project were not covered by the Reserve Report as more data were required for conducting an evaluation. The Group will accelerate the pace of new well development and enlarge the scope of well fracturing in order to realise the development potential of the Kyrgyzstan Project.

Table:

Set out below are the petroleum reserves of the Evaluated Zones in the Kyrgyzstan Project as at the Base Date of Evaluation：

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