China GengSheng Wins Two Fracture Proppant Supply Contracts

GONGYI, China, April 14, 2010 - China GengSheng Minerals, Inc., a high-tech industrial materials manufacturing company in China with products capable of withstanding high temperatures, reducing energy consumption, and boosting productivity in industries such as steel and oil, today announced it has won two proppant supply contracts with China's Changqing Oilfield, a subsidiary of China National Petroleum Corporation (CNPC). The total value of the two contracts is approximately $1.3 million.
The term of both contracts is one year, with order amounts of 2,000 metric tons and unit sales price of approximately $337 per metric ton, respectively. Pursuant to the contracts, GengSheng is to start shipping fracture proppants for Changqing Oilfield immediately. Fracture proppants are light, bauxite- based, grain-like materials that have a round and smooth surface and a quality of resisting high pressure and acid corrosion. They are used by oil and gas drillers to extract pockets of oil and natural gas scattered underground.
"GengSheng has maintained solid relationship with Changqing Oilfield, due to our technological advantages and resources advantages," said Mr. Shunqing Zhang, Chairman and CEO of GengSheng. "We have successfully won Changqing's bid for another year, which indicates the good momentum of the Fracture Proppant Segment's long-term development."
Changqing Oilfield is China's second largest oilfield. According to CNPC's website, Changqing Oilfield has a total area of 370,000 square kilometers for exploration, with a reported 8.5 billion tons of oil resources and 10.7 trillion cubic meters of natural gas. In 2009, the oil and gas equivalent production at Changqing had exceeded 30 million tons.