Wednesday, September 17, 2008

Mongolia Energy to Prospect Oil Block in Inner Mongolia

HONG KONG, Sep 17, 2008 -- Mongolia Energy Co., Ltd. (SEHK: 0276), a veiled fast-growing mineral resource developer registered in Bermuda, announces on September 16 a consortium in which it takes a 20% stake wins a oil prospecting project in Inner Mongolia.

The consortium got the licenses to prospect the 12th section of Ergel Block in East Gobi Basin in Inner Mongolia. It will just pay a very small rental for the block annually but should take charge of all expenditures for oil and gas exploration there. It promises that the prospecting investment and other related spending in the coming five years will be no lower than USD 52.77 million. Mongolia Energy will share 20%, or USD 10.554 million.

Mongolian government has the right to charge franchise tax on oil and gas output from the block. After covering its cost, the consortium should share the production with the local government. According to related benchmark, the Mongolian government will gain a bigger share.

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