Primeline Q2 Sees Better Revenues

HONG KONG, CHINA--(Marketwired - Nov. 30, 2015) -

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Primeline Energy Holdings Inc. ("Primeline" or the "Company") (TSX VENTURE:PEH) today announced that it has filed its interim unaudited financial statements for the quarter ended September 30, 2015 (Financial Q2) and related management discussion and analysis (MD&A). Copies of these documents may be obtained at www.SEDAR.com under Primeline's profile or on Primeline's website at www.pehi.com.

Financial Q2 results saw improved off take volumes over previous quarter

Primeline's results for the quarter saw an increase in off take volumes by Zhejiang Gas, the sole customer for the LS36-1 gas, versus the prior quarter. Revenues from oil and gas sales increased to RMB 29,583,588 (CAD$6,255,781) in the Financial Q2 from RMB 6,078,216 (CAD$1,214,914) in the previous period. Despite the better revenues, there was a greater loss of RMB 76,518,266 (CAD$16,180,644) compared to the loss of RMB 27,210,855 (CAD$5,438,907) for the previous quarter. This deterioration resulted primarily from translation effects on our US dollar denominated bank loan as a result of the weaker Chinese currency.

As of September 30, 2015, Primeline held cash resources of RMB 298,070,052 (or approximately CAD$63 million) of which RMB 150,000,000 (CAD$31,719,180) is held in a long-term bank deposit account classified as a non-current asset. There was no debt repayment obligation during the quarter but the Company made its scheduled capital repayment of US$21 million on November 20, and intends to make an interest payment of approximately US$7 million in December 2015.

Update on Gas Sale Contract discussions

As reported in previous quarters, the substantial build out of long distance pipeline infrastructure and LNG terminals along China's East Coast, the general slowdown of China's economy and the decline in the oil price since 2014, have led to an oversupply of gas in the region. The main suppliers to the East China gas market responded by lowering prices and this led to reduced demand for LS36-1's gas, particularly in the previous quarter, as well as pressure from Zhejiang Gas to adjust prices.