China Rongsheng Heavy : Announcements and Notices - Voluntary Announcement Business Update on Development of Oilfield Zones in Kyrgyzstan

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中國熔盛重工集團控股有限公司

(Incorporated in the Cayman Islands with limited liability) (stock code: 01101)

This announcement is made by China Rongsheng Heavy Industries Group Holdings Limited (the "Company", and together with its subsidiaries, the "Group") on a voluntary basis with the purpose of keeping its shareholders and potential investors informed of the latest business development of the Company.
Reference is made to the Company's announcements dated 21 August 2014 and 11
September 2014 in relation to the acquisition of 60% interest in the Kyrgyzstan project (the
"Acquisition") relating to five oilfield zones (the "Oilfield Zones").
The Company is pleased to announce that the development of the Kyrgyzstan project has been smooth and the Company achieved good progress in increasing the oil production of the Oilfield Zones. As at 13 October 2014, the drilling works of five new oil wells in the Oilfield Zones have been completed. Two of them, including one which has been conducting fracturing operations and recorded an average daily production volume of approximately 174 barrels of oil, have already commenced production. The rest of the new wells are undergoing the process of perforating, testing and fracturing. In order to further increase oil production, the Group will continue to take greater efforts in the exploitation of new wells, speeding up the repair of old wells, and enlarging the scale of fracturing.
The directors of the Company (the "Directors") believe that the completion of the Acquisition in September 2014 represented a great opportunity for the Group to enter into the energy sector. Given the relatively adverse market conditions of the shipbuilding industry for the time being, appropriate business opportunities in the energy sector can assist the Group in diversifying its operations and broadening its sources of revenue, and promoting the Group's transformation to a comprehensive heavy industry player in the energy industry, so as to generate a greater contribution to the overall interests of our shareholders.
During the past few months, the Company has been working to identify suitable investment opportunities in the energy resources exploitation sector in regions outside the PRC, including Central Asia. With an objective to enhancing shareholders' value, the Group will continue its efforts in seeking potential business opportunities in the energy sector in all aspects, and will consider the possibility of signing a memorandum of understanding or letter of intent relating to the energy sector in the future should the suitable opportunities arise.
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By Order of the Board

Hong Kong, 14 October 2014

As at the date of this announcement, the directors of the Company are: Executive directors:

Mr. CHEN Qiang (Chairman), Mr. WU Zhen Guo, Mr. HONG Liang, Mr. Sean S J WANG, Mr. WANG Tao, Mr. WEI A Ning and Ms. ZHU Wen Hua;

Independent non-executive directors:

Mr. XIA Da Wei, Mr. HU Wei Ping, Mr. WANG Jin Lian and Ms. ZHOU Zhan.

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