Honghua Group To Launch Integrated Shale Gas Exploitation Solution At OTC 2012

Honghua Group Limited, the largest exporter of drilling rigs in China, announced today the launch of its new, integrated shale gas exploitation solution. A drilling and fracturing site utilizing Honghua's new system offers extensive benefits compared to a conventional fracturing site, including a reduction in equipment and operational footprint, equipment and energy cost savings and environmental considerations.

The company's integrated shale gas solution has three main advantages: Reduced Operational Footprint: The Honghua solution requires less equipment, allowing for a significantly smaller footprint and quick deployment. The set of new, highly automated rigs includes three types, operating simultaneously to drill vertical and horizontal sections. Honghua's system provides a 6000 horsepower fracturing pump; three dual-pump fracturing trucks can reach the same capacity generated by 20 trucks in a conventional operation. Additionally, only six of Honghua's flexible water tanks can satisfy fracturing operations that would generally require 30 tanks. Cost Savings: The Honghua integrated solution allows for a cost savings of at least 10% as compared to conventional solutions. In addition to the obvious cost advantages associated with a reduction in equipment, Honghua replaces the conventional diesel generator with a gas generator, allowing the use of self-produced shale gas for power generation.

With Honghua's solution, about 178 tons of diesel fuel per well can be saved. Environmental: Honghua's solution reduces approximately 226 tons of carbon emissions per well. After completion, it is estimated that 60% of the land occupied can be reutilized. "We are very pleased to launch this new solution at OTC 2012. This represents a significant step in land drilling and fracturing and we are excited to bring this innovative technology to the United States," said ZHANG Mi, Chairman & President of Honghua Group. The integrated solution is scheduled to be commercially implemented in a large scale within two years. About Honghua Group Honghua Group Limited is a large-scale equipment manufacturer and drilling service provider, specializing in research, design, manufacture, and set-assembly of drilling rigs, offshore engineering, and oil & gas exploitation and production equipment. Headquartered in Chengdu, Sichuan, it is the biggest exporter of drilling rigs in China, and one of the largest land drilling rig manufacturers in the world.