香港交易及結算所有限公司及香 港聯合交易所有限公司對本公佈的內容概不負責，對其準確性或完整性 亦不發表任何聲明，並明確表示，概不就因本公佈全部或任何部份內容而產生或因倚賴該等內容而引致 的任何損失承擔任何責任。 (於百慕達註冊成立之有限公司) (股份代號：702) 截至2022年12月31日止年度 之經審核全年業績公佈 經審核全年業績 中國油氣控股有限公司(「本公司」)董事會(「董事會」)宣佈，本公司及其附屬公司(統稱 「本集團」)截至2022年12月31日止年度之經審核綜合業績連同去年度之比較數字如下： 綜合全面收益表 截至2022年12月31日止年度 (以港元計算) 2022 2021 附註 千港元 千港元 營業額 3 & 10 543,080 394,236 直接成本 (375,247) (332,753) 毛利 167,833 61,483 其他收入 4 24,720 49,480 其他虧損淨額 5 (386,691) (225,165) 按攤銷成本計量之財務資產之 已確認預期信貸虧損淨額 3,623 (344,853) ...

Financial Performance - The total amount of receivables as of 2021 was RMB 30,142,000, compared to RMB 88,884,000 in 2020, indicating a significant decrease of approximately 66%[9] - The company provided loans totaling RMB 37,070,000 to an oil and gas operation, which has since been sold, down from RMB 44,024,000 in 2020[9] - A loan of RMB 21,000,000 was issued to a mining company, which was also sold, reflecting a decrease from RMB 24,651,000 in 2020[9] - The company has a net receivable amount of RMB 30,006,000 after accounting for impairment losses of RMB 136,000[9] - The company has faced cash flow challenges, leading to the sale of receivables to alleviate immediate financial pressures[8] Business Operations - The financial services business primarily targets the oil and gas industry, public hospitals, and major state-owned or private enterprises[3] - The company has established a five-year loan agreement with a private enterprise in China, with the loan amount secured by 80% equity in a company holding oil exploration rights[6] - The company has implemented a comprehensive due diligence process for potential borrowers, including KYC procedures and financial assessments[4] - The company is actively monitoring loan performance and assessing credit risks through regular client interactions and financial reviews[5] - The company’s financial services operations are regulated by local financial authorities in Shaanxi Province, China[3] Governance - The board of directors includes two executive directors, Dr. Dai Xiaobing and Mr. Wen Zihun, along with four non-executive directors and three independent non-executive directors[10]

Financial Performance - Revenue for the six months ended June 30, 2022, was HK$258,285,000, representing a 101.9% increase from HK$128,140,000 in the same period of 2021[8]. - Gross profit for the same period was HK$62,876,000, up 55.6% from HK$40,387,000 in 2021[8]. - Loss for the period was HK$95,370,000, a significant improvement compared to a loss of HK$219,185,000 in the prior year, reflecting a 56.5% reduction in losses[8]. - Total comprehensive income for the period was HK$(206,719,000), compared to HK$(193,690,000) in 2021, indicating a slight increase in overall losses[14]. - Basic and diluted loss per share was HK$(2.81), an improvement from HK$(6.56) in the previous year[14]. - The company reported a loss for the period of HK$93,846,000 for the first half of 2022[30]. - The accumulated losses as of June 30, 2022, were HK$283,358,000, compared to HK$171,736,000 at June 30, 2021[30]. - The total comprehensive income for the period ended June 30, 2022, was a loss of HK$204,817,000, compared to a loss of HK$194,005,000 in the previous year[30]. - The profit before income tax expense for the period was HK$51,608, compared to a loss of HK$220,009 in the previous year, indicating a substantial turnaround[65]. - The company reported a profit for the period of HK$51,608, contrasting with a loss of HK$219,185 for the same period in 2021[65]. Expenses and Costs - Direct costs increased to HK$195,409,000, up from HK$87,753,000, reflecting a 122.3% rise[8]. - Selling and distribution expenses were HK$7,072,000, slightly higher than HK$6,874,000 in 2021, indicating a 2.9% increase[8]. - Administrative expenses decreased to HK$16,133,000 from HK$20,270,000, showing a 20.1% reduction[8]. - Other income decreased significantly to HK$429,000 from HK$30,414,000, a decline of 98.6%[8]. - Finance costs rose to HK$132,907,000 from HK$121,329,000, marking a 9.5% increase[8]. - The cost of inventories sold recognized as expenses surged to HK$117,234,000, compared to HK$40,783,000 in the prior year, indicating a significant increase in operational costs[1]. - Depreciation on property, plant, and equipment rose to HK$27,956,000 from HK$13,888,000, reflecting increased asset utilization or investment[1]. - Employee costs, including directors' remuneration, decreased slightly to HK$11,910,000 from HK$12,295,000 year-over-year[1]. Assets and Liabilities - Total non-current assets increased to HK$5,019,869, up from HK$4,767,267, representing a growth of approximately 5.3%[18]. - Current assets rose to HK$210,072 from HK$151,891, marking an increase of about 38.2%[18]. - Total assets decreased slightly to HK$5,171,760 from HK$4,977,339, reflecting a decline of approximately 3.9%[18]. - Total current liabilities increased to HK$2,454,739 from HK$2,428,366, which is an increase of about 1.1%[23]. - Net current liabilities improved to HK$2,244,667 from HK$2,276,475, indicating a reduction of approximately 1.4%[23]. - Total non-current liabilities decreased to HK$805,112 from HK$819,187, showing a decline of about 1.7%[23]. - Total equity attributable to owners of the Company decreased to HK$1,705,860 from HK$1,910,677, representing a decline of approximately 10.7%[23]. - Cash and cash equivalents increased significantly to HK$47,616 from HK$13,800, reflecting a growth of about 245.5%[18]. - Inventories rose to HK$30,770 from HK$13,323, indicating an increase of approximately 130.8%[18]. - Loans receivable increased to HK$20,817 from HK$15,618, marking a growth of about 33.9%[18]. - As of June 30, 2022, total borrowings amounted to HK$834,333,000, an increase of 4.2% from HK$797,959,000 as of December 31, 2021[125]. - The non-current portion of borrowings as of June 30, 2022, was HK$478,313,000, down from HK$501,050,000[125]. Cash Flow - For the six months ended June 30, 2022, the net cash generated from operating activities was HK$54,336,000, a decrease from HK$58,349,000 in the same period of 2021[30]. - The net cash used in investing activities for the same period was HK$85,436,000, significantly higher than HK$4,273,000 in 2021[30]. - The net cash generated from financing activities was HK$33,032,000 in the first half of 2022, contrasting with a net cash used of HK$38,069,000 in the same period of 2021[30]. Business Segments and Operations - The Group operates four reportable segments: coalbed methane, raw and cleaned coal, oil and gas exploitation, and financial services[54]. - The revenue from the Sanjiao CBM Project was approximately HK$133,593,000, up approximately 69% from HK$79,043,000 in the prior year[151]. - The raw coal washing project in Shanxi Province generated revenue of approximately HK$118,003,000, an increase from HK$44,987,000 in the previous interim period[156]. - EBITDA for the Sanjiao CBM Project was approximately HK$93,265,000, reflecting a 53% increase from HK$60,938,000 in the prior year[143]. - The gas sale-to-production rate for the Sanjiao CBM Project was approximately 97%, stable compared to 96% in the previous interim period[143]. - As of June 30, 2022, the Sanjiao CBM Project had completed a total of 170 wells, with 143 wells in the normal dewatering and gas producing stage[150]. Financial Strategy and Outlook - The Group's overall financial condition is expected to gradually improve as it explores various financing options and debt restructuring plans[41]. - Management is exploring various options to mitigate financial pressure, including additional financing and negotiations with creditors[174]. - The Group aims to maintain a prudent financial strategy and proactive debt management while focusing on the development of the Sanjiao CBM Project[174]. - The Group anticipates receiving the remaining balance of the shortfall of the guaranteed profit for the years 2020 and 2021 before the end of 2022[157]. - The Group expects stronger demand for natural gas in the second half of 2022 as the economy recovers from the COVID-19 pandemic[172]. Legal and Compliance Issues - A winding-up petition was filed against the Company on August 17, 2022, related to an alleged unpaid amount of approximately HK$10,216,000 concerning corporate bonds[140]. - The company has taken legal actions against the vendor for the refund of deposits and settlement of related interest receivables[115]. Shareholder Information - Sino Oil and Gas Resources Investments Limited (SOGRI) owns 85,119,500 shares and has a short position of 70,800,000 shares[195]. - Dr. Dai Xiaobing beneficially owns 73,384,500 shares and has a short position of 66,724,500 shares[196]. - The company issued convertible bonds with an aggregate principal amount of US$130,000,000 on September 29, 2016[199]. - Based on the conversion price of HK$0.168 per share, a maximum of 6,012,500,000 shares may be allotted and issued upon exercise of the conversion rights[199]. - As of June 30, 2022, no other directors or chief executives had any interests or short positions in the shares of the company[200].

Financial Performance - For the year ended December 31, 2021, the company reported a revenue of HK$325,371,000, a decrease of 31.8% from HK$476,614,000 in 2020[20] - The loss for the year was HK$182,879,000, compared to a loss of HK$227,642,000 in 2020, indicating an improvement of 19.6%[20] - The loss attributable to owners of the company was HK$184,117,000 in 2021, compared to HK$230,952,000 in 2020, showing a reduction of 20.3%[20] - The Group reported a net loss of approximately HK$786.23 million for the fiscal year 2021, compared to a net loss of HK$182.88 million in 2020, primarily due to losses on the disposal of receivables and impairment losses on oil and gas exploration assets[42][46] - The finance cost for the year was approximately HK$242.50 million, compared to HK$209.62 million in 2020, indicating increased financial pressure on the Group[44][46] - The Group's net current liabilities stood at approximately HK$2.27 billion, reflecting ongoing financial challenges and heavy borrowing[31][32] - The Group's net assets as of December 31, 2021, were approximately HK$1,924 million, a decrease from HK$2,685 million in 2020, while total assets were approximately HK$5,172 million, down from HK$5,631 million[71] - The gearing ratio based on total assets increased to approximately 41.6% as of December 31, 2021, compared to 37.9% in 2020[71] Production and Sales - Total gas production in 2021 was approximately 128.06 million cubic meters, while gas sales were approximately 127.03 million cubic meters, achieving a sale-to-production rate of 99.2%[23] - The average sale-to-production rate for CBM in 2021 was 99.2%, indicating efficient operations in gas sales[23] - CBM sales revenue reached approximately HK$168.97 million in 2021, compared to HK$109.92 million in 2020, indicating a growth of about 53.6% year-over-year[53] - The production volume of CBM was approximately 128.06 million cubic meters in 2021, an increase from 101.75 million cubic meters in 2020, representing a growth of approximately 25.8%[53] - The sales volume of CBM was approximately 127.03 million cubic meters in 2021, compared to 96.37 million cubic meters in 2020, resulting in a gas sale-to-production rate of approximately 99.2%[53] Project Development - The company aims to accelerate the construction of the CBM industrial base in Sanjiao to meet the increasing demand for natural gas in China, projected to reach 395 bcm in 2022, up 7% from 2021[27] - The Group plans to accelerate the development of its Sanjiao coalbed methane project to contribute to clean energy supply and enhance safety and efficiency in coal mining operations[29] - The Group plans to drill an additional 25 to 30 multilateral horizontal wells in the CBM project to achieve a production capacity of 500 million cubic meters over the next 2-3 years[84] - The Sanjiao CBM Project recorded EBITDA of approximately HK$117.17 million in 2021, up from HK$71.24 million in 2020, reflecting a significant increase in profitability[53] - The total capital expenditure for the Sanjiao CBM Project was approximately HK$241.3 million in 2021, down from HK$307 million in 2020[65] Financial Strategy and Challenges - Sino Oil and Gas Holdings Limited is in active discussions with potential investor China Finance Development Group Co. Ltd. regarding investment opportunities to optimize its financial structure[31][32] - The Group is exploring various financing options and debt restructuring to strengthen liquidity and improve its overall financial position[74] - The Group aims to introduce suitable investors to address financial difficulties and seize opportunities for oil and gas development, including potential mergers and acquisitions[85] - The Group's financial pressure is expected to gradually ease, supported by the growth of the coalbed methane operation in Shanxi[74] Corporate Governance - The company is committed to maintaining high standards of corporate governance and compliance through its experienced management team[116] - The company held three board meetings during the year, which is one less than the required four meetings as per the Corporate Governance Code[125] - The Board consists of two executive directors, four non-executive directors, and three independent non-executive directors as of December 31, 2021[134] - The company complied with all code provisions of the Corporate Governance Code except for A.1.1, A.2.1, and E.1.2[125] - The Company has received annual confirmations of independence from all independent non-executive directors, complying with the Listing Rules[146] Management and Board Composition - Dr. Dai Xiaobing serves as both Chairman and Chief Executive Officer, which the Board believes ensures consistent leadership and effective strategy implementation[126] - The independent non-executive directors bring a wealth of experience from various sectors, including finance, law, and geology, contributing to the company's governance[112] - The Company provides comprehensive induction packages for new directors to ensure awareness of their responsibilities[153] - The Board has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, each with distinct responsibilities[170] - The Audit Committee consists of three Independent Non-Executive Directors (INEDs) and is responsible for reviewing the completeness, accuracy, and fairness of the company's financial statements[175]

C 中國油氣控股有限公司 SINO OIL AND GAS HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (於百慕達註冊成立之有限公司) Stock Code 股份代號: 702 A 8 中石油煤层气 7 奥瑞安能源国际 | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------| | | | | | | | | | | | | | --- | --- | |----------------------------------------------------------|----------------------------------| | | | | Corporate Information | 公司資料 | | DIRECTORS | 董事 | | Executive Directors | 執行董事 | | Dr. Dai Xiaobing (Chairman and Chief Executive Officer) | 戴 ...

Financial Performance - For the year ended December 31, 2020, the revenue from continuing operations was HK$325,371,000, a decrease of 31.8% compared to HK$476,614,000 in 2019[11]. - The loss for the year attributable to owners of the company from continuing operations was HK$184,117,000, compared to a loss of HK$227,642,000 in 2019[11]. - The company reported a loss before income tax expense of HK$181,070,000 for continuing operations in 2020[11]. - The Group recorded a net loss of approximately HK$182,879,000 for the financial year 2020, a significant reduction of nearly 20% compared to the net loss of HK$227,642,000 in 2019[53]. - The Group's turnover for the year was approximately HK$325,371,000, a decrease from HK$476,614,000 in 2019, reflecting a decline due to the COVID-19 pandemic[52]. - EBITDA for the Group was recorded at approximately HK$82.8 million for the year[36]. - EBITDA for the Group was approximately HK$82,874,000, down from HK$98,152,000 in 2019[53]. - The Sanjiao CBM Project recorded EBITDA of approximately HK$71,235,000, compared to HK$87,918,000 in 2019[65]. - The Group's administrative expenses decreased by approximately 11.7% in 2020, contributing to a narrowing of losses by nearly 20% year-over-year[36]. Production and Sales - Total gas production in 2020 was approximately 101.75 million cubic meters, while gas sales were approximately 96.37 million cubic meters[15]. - The average sale-to-production rate for coalbed methane (CBM) in 2020 was 94.7%[16]. - The sales mix for CBM in 2020 consisted of 11.85% residential piped sales and 88.15% industrial piped sales[17]. - The production volume of CBM was approximately 101.75 million cubic meters, slightly down from 103.22 million cubic meters in 2019[65]. - The gas sale-to-production rate for the Sanjiao CBM Project was approximately 94.7%, down from 97.7% in 2019[65]. - CBM sales revenue for the Sanjiao CBM Project amounted to approximately HK$109,918,000, a decrease from HK$120,900,000 in 2019[65]. - Sales from the Sanjiao CBM Project amounted to approximately HK$109,918,000, down from HK$120,900,000 in 2019, reflecting a decline of 9.1%[48]. - Revenue from the raw coal washing project in Shanxi Province was approximately HK$207,660,000, a decrease of 40.6% from HK$350,353,000 in 2019[48]. Assets and Liabilities - As of December 31, 2020, non-current assets totaled HK$4,932,638,000, an increase from HK$4,404,156,000 in 2019[15]. - The net assets attributable to owners of the company were HK$2,674,738,000 as of December 31, 2020, compared to HK$2,638,185,000 in 2019[15]. - The total liabilities as of December 31, 2020, included non-current liabilities of HK$915,658,000, an increase from HK$574,673,000 in 2019[15]. - External borrowings, including the liability component of convertible notes, were approximately HK$2,134,368,000, up from HK$1,710,000,000 in 2019, with a gearing ratio of 37.9%[86]. Strategic Plans and Development - The company plans to continue focusing on gas production and sales expansion in the upcoming years[12]. - The Group plans to accelerate the development of the Sanjiao CBM Project to achieve a production capacity of 500 million cubic meters within the next 2-3 years[36]. - The Group is actively seeking merger and acquisition opportunities in oil and gas projects in North America and China[26]. - The Group is considering various financing options and debt restructuring to enhance liquidity, with expectations of gradual financial improvement[95]. - The Group is committed to enhancing shareholder value through strategic investments and operational improvements[120]. Governance and Management - The Company has complied with all code provisions in the Corporate Governance Code throughout the year ended December 31, 2020, except for the separation of roles of Chairman and CEO[145]. - The Board is committed to maintaining high standards of corporate governance to enhance shareholder value[144]. - The Company has established specific responsibilities for three committees: Audit Committee, Remuneration Committee, and Nomination Committee[158]. - The Audit Committee consists of three INEDs and is chaired by Professor Wong Lung Tak Patrick, assisting the Board in financial reporting and corporate control[183]. - The Company has a clear delegation of day-to-day operations to divisional management with established guidelines[158]. - The Company provides continuous professional development for Directors, including training on corporate governance and regulatory developments[167]. - The Company maintains an insurance policy to indemnify Directors and senior executives against losses arising from their duties[175]. Market and Economic Context - China's GDP increased by 2.3% in 2020 compared to 2019, showing economic recovery post-COVID-19[106]. - The Group anticipates strong demand for clean energy, particularly natural gas, as part of China's plan to reduce carbon emissions by 18% during the "14th Five-Year Plan"[106].

中國油氣控股有限公司 SINO OIL AND GAS HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (於百慕逵註冊成立之有限公司) Stock Code 股份代號: 702 Interim Report " 2020 中 Corporate Information 公司資料 | --- | --- | |-------------------------------------------------------|-----------------------------------------| | | | | DIRECTORS | 董事 | | Executive Directors | 執行董事 | | Dr. Dai Xiaobing (Chairman) | 戴小兵博士 （主席） | | Mr. King Hap Lee (Chief Executive Officer) | 景哈利先生 （行政總裁） | | Mr. Wan Tze Fan Terence | 温子勳先生 | | Non-executive D ...

(Incorporated in Bermuda with limited liability) (於百慕達註冊成立之有限公司) Stock Code 股份代號: 702 Annual Report 2019 年報 Contents CORPORATE INFORMATION FIVE YEAR FINANCIAL SUMMARY BUSINESS STRUCTURE CORPORATE STATEMENT CHAIRMAN'S STATEMENT MANAGEMENT DISCUSSION AND ANALYSIS DIRECTORS AND SENIOR MANAGEMENT PROFILES CORPORATE GOVERNANCE REPORT REPORT OF THE DIRECTORS INDEPENDENT AUDITOR'S REPORT CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CHANGES IN ...

Revenue and Profitability - Revenue for the six months ended June 30, 2019, was HK$157,807,000, a decrease of 50.2% compared to HK$314,790,000 in the same period of 2018[9] - Gross profit increased to HK$24,055,000, up 57.3% from HK$15,302,000 in the previous year[9] - Loss for the period was HK$67,057,000, a significant improvement from a loss of HK$164,603,000 in the same period of 2018, representing a reduction of 59.3%[9] - Total comprehensive income for the period was HK$132,974,000, compared to HK$267,576,000 in 2018, indicating a decrease of 50.3%[12] - Basic and diluted loss per share was HK$2.08, compared to HK$8.87 in the previous year, showing an improvement[12] - The total comprehensive income for the period ended June 30, 2019, was a loss of HK$135,115,000, compared to a loss of HK$269,503,000 in the same period of 2018[26] - The company reported a significant increase in inventories, which rose to HK$35,210 from HK$11,950, marking a growth of approximately 194%[16] - The company reported a loss of HK$102,404,000 attributed to unallocated expenses for the period[77] - The Group recorded a net loss of approximately HK$67,057,000, a significant reduction of about 59% from the net loss of HK$164,603,000 in the same period last year[168] Expenses and Costs - Other income for the period was HK$39,821,000, slightly down from HK$42,796,000 in 2018, a decrease of 6.9%[9] - Administrative expenses decreased to HK$32,642,000 from HK$39,728,000, reflecting a reduction of 17.8%[9] - Finance costs were HK$92,146,000, down 41.7% from HK$158,261,000 in the previous year[9] - Employee costs increased to HK$15,001,000 for the six months ended June 30, 2019, compared to HK$13,320,000 for the same period in 2018, reflecting a growth of 12.6%[98] - Total capital expenditure on property, plant, and equipment was HK$11,786,000 for the six months ended June 30, 2019, down from HK$13,190,000 in the same period of 2018, indicating a decrease of 10.7%[111] Assets and Liabilities - Total assets as of June 30, 2019, amounted to HK$4,974,132, an increase from HK$4,962,872 as of December 31, 2018[16] - Non-current assets totaled HK$4,425,634, slightly down from HK$4,441,642 at the end of 2018[16] - Current assets increased to HK$548,498 from HK$521,230, reflecting a growth of approximately 5.2%[16] - Total current liabilities rose to HK$1,610,514, compared to HK$1,473,224 at the end of 2018, indicating an increase of about 9.3%[20] - Net current liabilities stood at HK$1,062,016, up from HK$951,994, showing a deterioration in liquidity[20] - Total non-current liabilities were HK$487,986, slightly higher than HK$481,042 reported at the end of 2018[20] - Net assets decreased to HK$2,875,632 from HK$3,008,606, reflecting a decline of approximately 4.4%[20] - As of June 30, 2019, total equity stood at HK$2,875,632,000, reflecting a decrease from HK$3,066,315,000 as of June 30, 2018[26] - The Group's total receivables, including trade and other receivables, amounted to HK$411,894,000 as of June 30, 2019, compared to HK$365,106,000 as of December 31, 2018, an increase of 12.9%[119] Cash Flow and Financing - For the six months ended June 30, 2019, the net cash generated from operating activities was HK$42,705,000, compared to HK$2,577,000 in the same period of 2018, representing a significant increase[27] - The net cash generated before financing activities for the same period was HK$47,383,000, up from HK$1,312,000 in 2018[27] - The net cash used in financing activities for the six months ended June 30, 2019, was HK$62,955,000, compared to a net cash generated of HK$37,381,000 in the same period of 2018[27] - The company experienced a foreign exchange rate change impact of HK$5,090,000 on cash and cash equivalents during the first half of 2019[27] - Total borrowings as of June 30, 2019, were HK$484,387,000, compared to HK$477,123,000 as of December 31, 2018[133] - The effective interest rates on secured borrowings ranged from 5% to 12%, while unsecured borrowings ranged from 18% to 24% as of June 30, 2019[136] Segment Performance - For the six months ended June 30, 2019, total revenue was HK$157,807,000, with contributions from coalbed methane (HK$58,185,000), raw and cleaned coal (HK$73,980,000), and financial services (HK$25,642,000) [77] - Segment profit before income tax expense was HK$15,485,000 for coalbed methane, HK$11,584,000 for raw and cleaned coal, and HK$9,816,000 for oil and gas exploitation, resulting in a total profit before tax of HK$65,093,000 [77] - The financial services segment did not report any sales or trading transactions with other segments, indicating a focus on external revenue generation [73] - The company operates four reportable segments: coalbed methane, raw and cleaned coal, oil and gas exploitation, and financial services, each requiring distinct business strategies [72] Regulatory and Accounting Changes - The company has applied HKFRS 16 from January 1, 2019, using the modified retrospective approach, which does not restate comparative information[12] - The company has adopted HKFRS 16 starting January 1, 2019, impacting the financial reporting of lease liabilities[18] - The adoption of HKFRS 16 resulted in the recognition of right-of-use assets amounting to HK$18,227,000 as of January 1, 2019[52] - Lease liabilities recognized under HKFRS 16 totaled HK$14,312,000 as of January 1, 2019, reflecting the present value of future lease payments[59] - The transition to HKFRS 16 led to a reclassification of lease expenses from operating lease expenses to depreciation and finance costs[65] Future Outlook and Strategic Initiatives - The board is focused on improving operational efficiency and reducing costs to enhance profitability in future periods[8] - The Group faces financial pressure from convertible notes amounting to HK$1,014,000,000 due in September 2019, with management actively discussing options to amend terms or negotiate with potential investors[36] - Major shareholders and directors have confirmed their commitment to provide ongoing financial support to the Group during financial difficulties, ensuring sufficient working capital for the next twelve months[41] - The company is actively seeking quality investment opportunities in overseas upstream businesses, specifically targeting oil and gas fields in Alberta, Canada[200] - A possible acquisition of 51% equity interests in urban gas pipeline infrastructure companies in Guizhou is under due diligence[198]

Financial Performance - Revenue from continuing operations for the year ended December 31, 2018, was HK$427,867,000, a decrease from HK$497,935,000 in 2017, representing a decline of approximately 14%[13] - The loss before income tax expense for continuing operations was HK$382,926,000 for 2018, compared to a loss of HK$158,026,000 in 2017, indicating a significant increase in losses[13] - The total loss for the year attributable to owners of the company was HK$385,885,000, compared to a loss of HK$159,561,000 in the previous year, reflecting a year-over-year increase of approximately 142%[13] - Basic and diluted loss per share for the year was HK$15.64, worsening from HK$9.55 in 2017[13] - The company reported a profit from discontinued operations of HK$5,509,000, which contributed positively amidst the overall losses[13] - The income tax expense for the year was HK$2,959,000, which is a reduction from HK$6,112,000 in 2017, indicating a decrease in tax liabilities[13] - The Group recorded a net loss of approximately HK$385,885,000 for the financial year 2018, compared to a net loss of HK$159,561,000 in 2017, mainly due to high finance costs and impairment losses[45] - Finance costs incurred during the year were approximately HK$324,547,000, with cash flow-affecting finance costs at approximately HK$110,084,000[46] Operational Highlights - In 2018, total gas production was approximately 97.42 million cubic meters, while gas sales reached 78.10 million cubic meters[16] - Pipeline gas sales accounted for 100% of total gas sales in 2018[16] - The sales mix for coalbed methane in 2018 was 14.7% for residential piped sales and 85.3% for industrial piped sales[18] - The Group holds a 70% interest in the Sanjiao CBM Block through a production sharing contract with PetroChina as a partner[21] - The Group aims to enhance production capacity and maintain steady growth through the Sanjiao CBM Project[31] - The operational phase of the Sanjiao CBM Project has commenced, contributing to improved cash flow and enhancing the company's asset-liability position[92] - The production and sales of CBM were approximately 97.42 million cubic meters and 78.10 million cubic meters respectively, resulting in a gas sale-to-production rate of nearly 80%[60][62] Strategic Initiatives - The company has been focusing on restructuring its operations to improve financial performance and reduce losses in the upcoming fiscal year[12] - Future outlook includes potential market expansion strategies and the introduction of new technologies to enhance operational efficiency[12] - The management is exploring opportunities for mergers and acquisitions to strengthen its market position and diversify its portfolio[12] - The Group is actively seeking merger and acquisition opportunities in the oil and gas sector in North America and China[21] - The Group is exploring investment opportunities in overseas upstream businesses, specifically oil and gas fields in Alberta, Canada[71] - The Group aims to assess the feasibility of diversified business development to enhance sustainability and stability of returns for shareholders[112] Market Conditions - The natural gas market in China is projected to see rapid growth until 2040, driven by government initiatives for environmental protection[25] - The Shanxi Government's policies, such as "Gasification for Shanxi," are expected to significantly boost the coalbed methane industry[25] - In 2018, China's natural gas consumption increased by 17.7%, indicating a flourishing market and a favorable environment for the Group's operations[106] - The International Energy Agency projects that China will become the largest importer of LNG in 2019, with net imports expected to approach European Union levels by 2040[106] Financial Position - As of December 31, 2018, the company's external borrowings, including convertible notes, amounted to approximately HK$1,595 million as of December 31, 2018, down from HK$1,772 million in 2017[83] - The gearing ratio based on total assets was approximately 32.14% as of December 31, 2018, compared to 32.75% in the previous year[83] - The Group's net current liabilities included a convertible note with a principal amount of HK$1,014 million due in September 2019, creating significant financial pressure[96] - The Company is exploring various options to settle the convertible note, including full or partial conversion, amending terms to extend maturity, and seeking medium to long-term financing from financial institutions[96] Corporate Governance - The Board of Directors is committed to high standards of corporate governance, ensuring transparency and accountability to enhance shareholder value[155] - The Company complied with all provisions of the Corporate Governance Code throughout the year ended December 31, 2018[156] - The Audit Committee is responsible for monitoring financial matters and approving major capital expenditures[169] - The Company has established clear guidelines for divisional management regarding their authority and responsibilities[169] - The roles of Chairman and Chief Executive Officer are separated, with Dr. Dai Xiaobing as Chairman and Mr. King Hap Lee as CEO, ensuring a balance of power[189] Management and Personnel - The Group employed approximately 332 employees as of December 31, 2018, with remuneration policies based on market levels and individual performance[104] - The management team has extensive experience in government relations and financial management, contributing to the Group's operational efficiency[120] - The Company encourages continuous professional development for all Directors and senior management to enhance their knowledge and skills[177] - The Company provides monthly updates to all Directors to keep them informed of the Company's circumstances, enabling informed decision-making[183]