Operational Update

RNS Number : 5295Q

Roxi Petroleum Plc

20 October 2011

 



20 October 2011

Roxi Petroleum plc

("Roxi Petroleum" or the "Company")

Operational Update

Roxi Petroleum, the Central Asian oil and gas company with a focus on Kazakhstan, announces the following update:

·      Cancellation of the sale and purchase agreement (the "SPA") with BT Corporation for the sale of 58.41 per cent. interest in Munaily

·      Loan of US$2 million provided to Munaily

·      Update on pilot production from NW Konys and South Yelemes fields

·      BNG North Yelemes Well 136 exploratory well planned to spud during November 2011

·      Plans to mobilize a rig to drill 2 appraisal wells in NW Konys

Munaily

Introduction

Roxi Petroleum is pleased to announce that agreement has been reached to cancel the sale first announced in December 2008 of 58.41 per cent. of Munaily. This will allow Roxi to retain a 58.41 per cent. interest in Munaily, which the Company estimates has GOST C1 reserves of 1.2 mmbls.

Cancellation of the previous agreement

Despite the best efforts of all concerned it has not been possible to complete the disposal of Roxi's 58.41 per cent. interest in Munaily, first announced in December 2008, with the prospective purchaser BT Corporation.  Accordingly, Roxi Petroleum and the BT Corporation have agreed to cancel the December 2008 SPA. The initial purchase consideration paid of US$0.5 million, will be repaid to the BT Corporation together with a sum of US$1.2 million in respect of work performed at Munaily by the BT Corporation since December 2008.

New Loan

The Company has secured a new loan with Mr. Kairat Satylganov, who has agreed to lend Munaily US$2 million. The intention is that the loan will be converted to consideration should the lender decide to acquire a 30% interest in Munaily. These funds will in part be used to compensate BT Corporation for work undertaken on the license area over the past two years as well as fund the costs associated with bringing H1 well into production. This well previously produced at a flow rate of up to 14 metric tons per day in 2008.

The Company has a 15 year production license and currently retains a 58.41 per cent. interest in Munaily LLP. The Company estimates Munaily has GOST C1 reserves of 1.2mmbls. The Company also plans to drill a further 2 production wells in each of 2012 and 2013, as part of the commitment under the existing production license.

Pilot Production from NW Konys and South Yelemes fields

The Company is still awaiting final emissions licenses for South Yelemes pilot production to commence and a gas flaring license for NW Konys. The Company expects both these assets to commence pilot production by end of 2011. Well locations are currently being prepared in both South Yelemes and NW Konys for them to be able to commence pilot production once all licenses are in place.

BNG North Yelemes

The Company has mobilized a rig to drill Well 136, on the North Yelemes structure, which is planned to spud during November 2011. This exploration well is targeted to encounter Jurassic Bajocian sands at a depth of 2550 meters and a secondary objective in the Triassic sands at a depth of 2840 meters. The total depth of Well 136 is planned at 2950 meters.

NW Konys

The Company also plans to mobilize a rig to drill 2 back to back appraisal wells on NW Konys, which are planned to spud within the next four weeks. These appraisal wells are planned to a depth of 1200 meters and are targeted to augment production levels from around existing well locations in the channel area. 

David Wilkes CEO commented:

"We are pleased to have been able to finally agree with BT Corporation acceptable terms for cancelling the previously negotiated sale and now look forward to moving this asset to production in 2011."

Enquiries

Roxi Petroleum plc David Wilkes CEO	[phone]
Strand Hanson Limited Andrew Emmott / Cordelia Orr-Ewing	[phone]
Renaissance Capital Limited John Porter	[phone]
Buchanan (Financial PR) Tim Thompson / Ben Romney / Helen Chan	[phone]

Qualified Person

Mt Hyansik Jang, Chief Executive Officer to the Company, has reviewed and approved the technical disclosures in this announcement.  He holds a BSc in Geology and has 25 years of international experience of exploration, appraisal, and development of oilfields in a variety of environments.

 

END

 

 

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