12th Jan 2006 13:35
Max Petroleum PLC12 January 2006 MAX PETROLEUM PLC ("Max or "the Company") ACQUISTION OF KAZAHKSTAN EXPLORATION CONTRACT Max Petroleum Plc (AIM:MXP), an oil and gas exploration and development companywith an initial focus on Kazakhstan, today announces that it has acquired theAstrakhansky Exploration Contract ("Contract") in Western Kazakhstan, subject tothe necessary registration of the Contract in Kazahkstan. The Company alsoannounces the appointment of a key operational Drilling Manager in Kazakhstan.These events follow the completion of an institutional placing, announced on28th December 2005, to raise £37.65m. Astrakhansky Exploration Contract The Contract is held by AlgaCaspiyGas, which has been acquired by Kazgas. Maxis to pay a consideration for the acquisition of Kazgas of US$43.5m plus theissue of 3.5m new ordinary shares in the Company and an option to subscribe 50mnew ordinary shares in the Company at a price of 100 pence per share to beexercised within 3 years. The Geological permit for this area was issued in September 2004 and, uponregistration, the Contract will be for a 4 year duration and a potential 2 yearextension. The Astrakhansky Exploration Contract area ("the Contract area") is located inthe Pre-Caspian Basin, one of the richest hydrocarbon basins in the world. It islocated in the Atyrau oblast of Western Kazakhstan on the edge of theKazakhstan-Russian border. The Contract area is serviced by good infrastructuresystems, being close to the CPC oil pipeline and the Atyrau-Caucasus gaspipeline. A regional railroad crosses the northern area of the contract acreage.The southern area of the contract acreage has some access issues due to itslocation in the Volga river delta, with less infrastructure in place. The Contract area, which totals 1272.6 square kilometres, is south-east of thegiant Astrakhan gas-condensate field, discovered by Gazprom in 1976 withoriginal natural gas reserves reported to be 85 tcf and condensate reserves of3.4 billion barrels. It is adjacent to the Imashevsky field, which is beingdeveloped jointly by KazMunaiGaz and Gazprom. A preliminary report prepared for Max by McDaniel & Associates Consultants Ltd.indicates that the Contract area appears to constitute a structural geologicalextension to Astrakhan and Imashevsky, and that the combined probable reservesof Astrakhansky could potentially be analogous to Imashevsky with reported C1and C2 reserves of 6.1 tcf of gas and 235 million barrels of condensate (1.25billion barrels of oil equivalent). The preliminary report estimates that theContract area could possibly contain fields with reservoir quality comparable tothe Imashevsky field and higher quality than the Astrakhan field. The full version of the preliminary competent persons report prepared byMcDaniel and Associates Consultants Ltd. will be available on the Company'swebsite: www.maxpetroleum.com, or via Pelham PR, contact details below. Forward Programme There are a number of prospects on the acreage and Max will initially targetthree exploration prospects, namely: Imashevsky South, Imashevsky South-West andImashevsky East, which offer the possibility to find hydrocarbon traps in thesub-salt carboniferous carbonates. All have been partially covered by Soviet era2D seismic, which shows three anticlinal structures. A well was drilled in 1986on Imashevsky South, indicating hydrocarbon shows. However, the well was notdrilled to an optimum depth for its primary target due to the technicallimitations at the time it was drilled. Imashevsky East has some limited seismiccoverage which indicates a structure under the salt deposition. It is envisaged to carry out a new seismic programme to better image theprospects provided by this acreage. Interpretation of this seismic will beundertaken to target the best prospects for drilling in the shortest possibletime. In addition, the existing Imashevsky South well may provide an opportunityto explore this structure prior to finalizing seismic interpretation byre-entering and deepening the well at a lower cost than by drilling a new well.Subject to availability of seismic crews, it is envisaged that interpretation ofthe seismic can be finalized by the end of 2006 and one or more exploratorywells can be drilled in 2007. Appointment Max now has four different exploration acreages, under 3 contracts, inKazakhstan and is pleased to announce the appointment of Tim Whittaker asDrilling Manager. Mr Whittaker has more than 30 years of extensive internationalexploration and development operations both on- and off-shore and has worked formajor oil companies (Shell, Mobil, Maersk) and for independents (Ranger Oil,Dragon Oil) all over the world. From 2002 to 2004 he was Drilling Manager atMaersk Oil in Kazakhstan, responsible for all drilling and work-over operationsin the Temir and Dunga PSC's. He ensured timely approval of programmes withrelevant local authorities and drilled two horizontal wells, one vertical welland two vertical exploration wells. He was also responsible for four work-oversto bring old wells back on production. Mr Whittaker will be a valuable addition to the managerial team and theoperational personnel establishing a local office in Kazakhstan and will overseeand carry out the comprehensive exploration and appraisal drilling programmeswhich Max plans to implement across its assets in the country. The managerialteam has previously worked together and has extensive sector experience andknowledge of Kazakhstan's geological, social and political structures. Jim Jeffs, Chief Executive Officer, commented: "The acquisition of the Astrakhansky Exploration Contract, which offerstremendous potential exploration upside, represents another important steptowards establishing Max as a leading international oil and gas company as webuild a strong foundation in our initial focus country of Kazakhstan. "I am also delighted to be able to announce the appointment of Tim Whittaker tothe Operations Team. Tim will contribute valuable drilling management experienceand he will play an important role in the extensive exploration and developmentprogrammes we have planned for the coming months and years." 12th January 2006 Enquiries: Max Petroleum PLC James A. Jeffs T: +44 (0)20 7514 1490 Chief Executive Officer Steve Kappelle T: +44 (0)20 7514 1490 Chief Operating Officer Pelham Public Relations Charles Vivian T: +44 (0)20 7743 6672 E : [email protected] Alisdair Haythornthwaite T : +44 (0) 20 7743 6676 E: [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MXP.L