2nd Oct 2006 08:36
Max Petroleum PLC02 October 2006 Max Petroleum Plc ("Max Petroleum" or "the Company") SECOND WELL SUCCESS Max Petroleum Plc ("Max Petroleum" or "the Company"), an oil and gas explorationand production company operating in Kazakhstan, is pleased to announce that ithas successfully drilled and completed the ZMA-2X well, which began productionon September 30, 2006. The ZMA-2X is the second of five wells that Max Petroleum plans to drill on theZhana Makat A structure in its E Block. The well was drilled down-dip from theZMA-1X discovery well in order to further delineate the field and hasencountered 18 metres of oil column, exceeding the Company's initialexpectations for the well. Similarly to its first well, the Company intends to gradually increase theproduction rate of the ZMA-2X to ensure that there is no reservoir damage. Thewell is in the process of being cleaned up, and an announcement about productionvolumes will be made when initial testing of the well has been completed. The Company also began drilling its ZMA-4X well today, which will be followedshortly thereafter by the ZMA-3X and ZMA-5X. The three additional wells arelocated further up-dip on the Zhana Makat A structure, where the Companybelieves the oil column thickness may exceed that seen in the flank areasdrilled by the ZMA-1X and ZMA-2X wells. The ZMA-1X discovery well is now producing 225 barrels of crude oil per day ("bopd"), an increase of 45 bopd over its initial rate announced on September14, 2006. The Company is continuing to evaluate the well in order to optimizeits production rate. Oil produced to date has been sold into the local market as unprocessed crude ata netback price to the wellhead of US$27 per barrel. The Company anticipatesthat processing at the nearby East Makat facility under its previously announcedco-operation agreement with KazMunaiGas Exploration & Production will commencebefore year-end, significantly increasing the netback price per barrel receivedby the Company. The Company's stock tank oil initially in place and recoverable reserves in theZhana Makat A structure are expected to be certified by the Company'sindependent advisors, McDaniel & Associates, in the course of the fourth quarterof 2006 following the completion of the initial drilling programme on ZhanaMakat A, which is expected to last until mid November. Jim Jeffs, Executive Chairman, commented: "With 18 metres of oil column, we are further encouraged by the success of oursecond well as we continue to explore the Zhana Makat A discovery. We arefocused on drilling and producing from our shallow assets in order to generatereserves, production and cash flow as rapidly as possible. Max Petroleum intends to drill up to 30 shallow wells by the end of next year.We are also pursuing our higher impact intermediate and deep drilling programsand intend to drill six intermediate and 3 deep wells during the same period. We believe the Company's knowledge of the downstream sector in Kazakhstan willprovide us with much better production economics once we move into the exportmarket." 2 October 2006 Enquiries: Max Petroleum PLC Michael B. Young T: +44 (0)20 7355 9590 Chief Financial Officer Peter Moss T: +44 (0)7834 572837 Investor Relations Manager 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] WH Ireland Ltd Paul Dudley T : +44 (0) 20 7220 1666 E : [email protected] Henrik Busk, Petroleum Engineering and Geology Manager of Max Petroleum, aPetroleum Geologist, is the qualified person that has reviewed and approved thetechnical information contained in this announcement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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