Operational Update

RNS Number : 9840S

Roxi Petroleum Plc

14 November 2013

 



Roxi Petroleum plc

("Roxi" or "the Company")

Operational update

Roxi, the Central Asian oil and gas company with a focus on Kazakhstan, is pleased to update the market with progress at its flagship asset BNG.

Background

Contract Area

Roxi has a 58.41% interest in the BNG Contract Area, which is located in the west of Kazakhstan 40 kilometres southeast of Tengiz on the edge of the Mangistau Oblast. The Contract Area  covers 1,561 square kilometres of which 1,376 square kilometres has 3D seismic coverage acquired in 2009 and 2010. Roxi resumed full control of BNG Ltd LLP in the second quarter of 2011.

The Contract Area has both shallow and deep prospects, which Roxi is funded to explore and develop following the US$40 million equity funding commitment in January 2013.

2013 Development activity

In previous periods Roxi developed a number of the shallow prospects to the point of testing in the South Yelemes portion of the BNG Contract Area. In March and April 2013, testing took place at Wells 54 and 805 at gross rates of 219 bopd and 120 bopd respectively.

Pilot production from these wells will commence on receipt of the relevant permits, which are expected before the end of the year.

Deep Wells

As previously announced, BNG Ltd LLP plans to drill 5 deep wells before the expiry of the existing licence in June 2015, with the locations of the first two deep wells already identified.

The first deep well, designated Well A5, is to be drilled to an estimated depth of 4,700 meters. It was spudded in July 2013 and is targeting the Permian formation at 4,120 meters and the Carboniferous formation at 4,390 meters. From seismic analysis the salt layer, which is expected to be some 100 meters thick will be encountered at around  3,800 meters.

As of 3 November Well A5 had reached a depth of 3,060 meters without material incident. It has been logged to that depth and intermediate casing was run. Once the cementing work has been completed drilling will resume.  Based on progress to date it is now expected that Total Depth will be reached early in the New Year.

As BNG has a turn-key drilling contract for Well A5 and will therefore not be subject to any cost overruns stemming from drilling delays.

Shallow wells

Well 143

Well 143 was spudded on 1 April 2013, on the MJ-F structure located towards the North of South Yelemes field at BNG. The total depth of the well was planned to be 2,500 metres.

This exploration initially targeted Jurassic Callovian sands at a depth of 2,170 metres with a secondary objective in the Cretaceous Valanginian limestone at a depth of 1,935 metres.

As the middle Jurassic section is also expected to be within 4-way dip closure in the MJ-F structure as well as the top Jurassic section, Roxi decided to drill continuously to 2,750 meters, 250 meters deeper than the original planned depth. The well reached the total depth of 2,750 meters in June 2013, and at that time wireline logging was run.

Interpretation of these results has been encouraging with three main intervals of interest were identified, between 2,193, 2,216 and 2,692 meters. Additionally, a fourth interval of interest at 2,088 meters has been identified from the core samples and will now be tested.

Testing on all four intervals is set to commence once the rig currently testing Well 806 has been released.

Well 805

In 2010 Well 805 was drilled to a total depth of 2,505 meters and tested two hydrocarbon-bearing zones between 1,965 meters and 2,230 meters at the rate of 150 bopd and 226 bopd respectively. In April 2013, testing took place at Well 805 at gross rates of 120 bopd.

Well 806

In 2010 Well 806 was spudded and drilled to a total depth of 2,557 meters. The well tested oil at three different intervals at 1,985, 1,998 and 2,022 meters at rates up to 130 bopd. A 90-day test of this well  is planned to commence later this month. Once completed the work-over rig testing rig will be moved to Well 413 to conduct a further 90-day test.

Well 807

Well 807, which is to be drilled to a Total Depth of 2,500 meters targeting Cretaceous Limestone and Jurassic Sandstone, was spudded in September 2013 and as of 12 November had reached a depth of 1,900 meters without material incident. Drilling has paused to allow core samples to be taken. It is now expected that the well will reach Total Depth early in the New Year.

Summary

While progress at both the deep and shallow wells has been slower than originally expected significant progress has been made without material difficulties.

In recent months Roxi has been funding development costs from pre sales of oil and it also has $22.5 million of funds remaining from its $40 equity facility issuable at a price of 7.41p per share .

The potentially value transforming results from the first of Roxi's deep wells are now expected early in the New Year.

Comments:

Clive Carver, Chairman said

"While progress has been slower than expected we are pleased that there has been no material issues with the first deep well and we now expect to reach Total Depth early in the New Year. The Company is well funded to continue with its ambitious drilling programme and looks forward to updating the market early in the New Year with drilling results. The key determinant of the true value of this field will be the results from the deep wells."

Enquiries

Roxi Petroleum PLC                                                                                   

Clive Carver, Chairman                                                                 [phone]

WH Ireland plc                  

James Joyce / James Bavister                                                     [phone]

Qualified Person

Mr. Hyunsik Jang, Chief Operating Officer of 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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