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Recon Announces Recently Developed Shale Gas Automation System

BEIJING — Recon Technology, Ltd. (NASDAQ 'RCON'), an oilfield service company provider (the "Company") operating primarily in the People's Republic of China, announced today the successful deployment of a new automation product for extraction of shale using a highly specialized supervisory control and data acquisition system ("SCADA"). This important achievement related to gas field exploitation and production comes on the heels of the introduction of Baker-Hughes fracturing technology to China Petroleum and Chemical Corporation's ("Sinopec") Zhongyuan Oilfield. Based on the unique characteristics of various shale gas strata, the SCADA system was developed by Recon to monitor and control the operation of on-site equipment to optimize automation through the use of an intelligent production process that is expected to provide a powerful new tool for the delivery of a safe and efficient method of a shale based gas field production.

The Chinese government has implemented policies to promote exploitation and subsequent utilization of shale gas by making subsidies available for gas development companies, encouraging efficiency and safety in gas production and incentivizing the use of gas for electricity production. To date current technology has proven inefficient in consideration of the challenges related to domestic shale strata; in particular equipment and related services have not provided an efficient solution.

"We have leveraged our recent experience and development investments to successfully deploy a new SCADA system for shale gas field well control and monitoring," noted Mr. Chen Guang Qiang, CTO of Recon Technology. "Differing from the typical hydrocarbon drilling applications in current use, gas extraction in these shale strata based field requires a high continuity of production. If this process is suspended, the subterranean gas reservoir will likely be 'choked off' and subsequently destroyed by water after a protracted shut-in period. This will cause premature shuttering of the well and result in wasted quantities of gas which cannot be gathered in timely manner by means of the current technology causing likely economic losses. Proper deployment of our automated monitoring and control system can help to resolve this issue by providing exact well data which is generally the most common cause for gas well failure. In the event of a disruption in production our system can detect failures as they occur in real time allowing our service team to take steps to avoid such failures."

Mr. Chen continued, "Our unique automation system has proven its ability to perform thus creating stability, reliability and scalability. As an enhancement to the development of China's unconventional gas reserves, we expect the demand for related equipment and services will increase. Recon is uniquely positions to provide reliable solutions for these challenges and will work to turn this opportunity to its advantage in establishing a leadership position in the shale gas well automation segment."

About Recon Technology, Ltd.

Recon Technology, Ltd. provides leading Chinese oil and gas companies with automation services designed to increase efficiency and profitability in relation to the exploration, extraction, production, refining and transportation of field based petroleum products for 10 years. Recon Technology is the first Chinese non-state-owned oil and gas service company to go public in the U.S. For additional information please visit us at


Recon Technology, Ltd.

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