2nd Aug 2007 07:02
Max Petroleum PLC02 August 2007 MAX PETROLEUM PLC (AIM: MXP) REGULATORY APPROVAL RECEIVED FOR TRIAL PRODUCTION PROJECT IN ZHANA MAKAT RESUMPTION OF DRILLING OPERATIONS IN EAST ALIBEK Max Petroleum Plc ("Max Petroleum" or "the Company"), an oil and gas explorationand development company focused on Kazakhstan, today announced that it hasreceived regulatory approval for its trial production project ("TPP") for theappraisal of its Zhana Makat discovery on Block E in western Kazakhstan. TheCompany also announced that it has resumed drilling operations in its EastAlibek license area. Key operational highlights are as follows: • TPP approved for a three year period; • Current production in Zhana Makat is 1,800 barrels of oil per day ("bopd") from six producing wells; • The ZMA-A9 well, drilled near the crest of the Zhana Makat structure, is producing approximately 900 bopd; and • Drilling operations have resumed in East Alibek. The approved TPP, valid for a period up to three years, allows the Company toproduce existing wells in the field and to drill and produce an additional 12exploration and development wells in order to gather additional data necessaryto prepare a full field development plan. Additional appraisal wells may beadded to the TPP in the future, dependent upon drilling results and theagreement of local regulatory authorities. The Company has drilled and completed a total of ten wells in the Zhana Makatfield to date, of which eight have been successful. Six wells are currentlyproducing, including four wells returned to production on 1 August 2007 uponreceipt of written TPP approval. The remaining two successful wells, which weredrilled on the crest of the Zhana Makat structure, encountered some of the bestpay sections seen in the field, with logs and cores demonstrating rockproperties and production potential above internal expectations. However,mechanical problems at the completion stage have delayed oil production fromthese two wells and the drilling rig is being used to perform remedial workoveroperations to bring them onto production as soon as possible. The Company is currently producing approximately 1,800 bopd from six producingwells, including the four wells recently brought back onto production. TheCompany is planning to drill a minimum of five additional wells in Zhana Makatduring the remainder of 2007 using the rig currently under contract and plans tocontract a second rig for Block E operations during October 2007 to pursueadditional shallow and intermediate targets. The Company has also resumeddrilling operations in East Alibek, re-entering the EA #1 well in mid-July 2007. Steve Kappelle, Chief Executive Officer, commented: "The approval of the Trial Production Project is a significant milestone for MaxPetroleum. Zhana Makat is the first of many shallow targets that have aconsiderable amount of unrealised potential within our large acreage position inBlocks A & E. It is very close to export infrastructure and we are currentlyexporting with significant netbacks. We plan to drill additional wells in ZhanaMakat in the short-term, including several crestal wells which hopefully willperform like the A9 well. As we increase production, we will work progressivelytowards our goal of using production and cash flow from our low cost shallowtargets to fund our more extensive, potentially higher reward deep plays in ourasset base." 2 August 2007 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 Merlin Tom Randell T: +44 (0)20 7653 6620 Maria Suleymanova M: +44 (0)777 587 5847 WH Ireland Ltd David Porter T : +44 (0) 20 7220 1666 James Joyce E : [email protected] [email protected] Peter Etherington-Smith, Exploration and Production Projects Manager, aPetroleum Engineer, 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:
MXP.L