Ordos basin has 25% of China’s coal output and 20% of total oil and gas output. It is the second largest sedimentary basin in China. It has 70 key exploration zones and 77 key mining zones. It is the most stable block in China in terms of tectonic movement. This is significant (in my opinion) as it means that hydrocarbon deposits will tend to be more uniformly found at given depths i.e. not disrupted / fragmented through geologic events. Probably explains the very high success rate of wells in this region. Coal beds (as at ZJS5) act as an excellent bottom seal and tight sands as an excellent top seal above the gas bearing shales. Ordos basin black shale organic matter is primarily upper Paleozoic/Mesozoic and are terrestrial (not marine) sediments. This is significant in terms of hydrocarbon formation as type 3 organic matter produce shales that remain in a state of medium to high maturity which favours shale gas enrichment. In other basins where the organic matter is marine sourced, the thermal maturity is generally too high and reaches over-maturity. Success at ZJS5 should significantly de-risk ZJS6 and ZJS7. Opinion only, DYOR.
LRL Price at posting:
27.5¢ Sentiment: ST Buy Disclosure: Held
