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Roxi Petroleum: extension to the BNG contract area

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Oilfield Technology,

Roxi, the Central Asian oil and gas company with a focus on Kazakhstan, has updated the market with news of a 140.6 km2 extension to the BNG Contract Area.

Existing BNG contract area

The BNG Contract Area is located in the west of Kazakhstan 40 km southeast of Tengiz on the edge of the Mangistau Oblast, covering an area of 1561 km2 of which 1376 km2 has 3D seismic coverage acquired in 2009 and 2010.

Roxi has a 58.41% interest in the BNG Contract Area via its 59% holding of Eragon Petroleum Limited.

Existing licence

In June 2015, the BNG licence was successfully renewed for a further three- year period to 7 June 2018.

The main focus of activity during the period of the renewed licence is to prove up the greatest amount of reserves consistent with avoiding unnecessary dilution to Roxi shareholders (the 'Estimation Phase').

During the Estimation Phase oil produced will be sold at domestic Kazakh prices. Thereafter, subject to the findings of the Estimation Phase, Roxi intends to seek a full production licence at BNG, which will allow oil produced to be sold at international prices.

Development approach and progress to date

The BNG Contract Area has both shallow and deep prospects, both of which Roxi is actively developing.

Production from Roxi Petroleum's operational shallow wells is currently at the rate of 1065 bpd (622 net to Roxi).

Extension area

The Kazakh regulatory authorities have granted BNG an extension to the BNG Contract Area of some 140.6 km2 to the north-east of the current block. The price for the extension is US$2 million and has been paid by Roxi.

Development approach to the extension area

Roxi intends to acquire 3D seismic data on the new territory before finalising its drilling plans. Of particular interest is the deep formation currently being explored by Deep Wells A5, 801 & A6, which the company believes extends into the new extension area.

BNG work programme

Roxi has also signed with Kazakh state authority an additional amendment to the existing Contract, under which BNG is obliged to drill at least three wells, two deep wells including A6 and one shallow well, in the period to the next licence renewal in June 2018.

Adapted from a press release by Louise Mulhall

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