Roxi Petroleum plc announce that the Company has agreed to farm-out an interest in the BNG Contract Area to Canamens. The agreement is conditional, inter-alia, on regulatory approval by the Kazakh authorities and the approval by Roxi’s shareholders. Following the Canamens farm-in to Ravninnoe Contract Area in 2008, this agreement aligns the Company and the Canamens group in a long term strategic partnership to develop two of the Company’s core assets, with the goal of reserves growth and early production.
Roxi also announces further appraisal success on the NW Konus field, within the Galaz Contract Area in the Kyzylorda Oblast, Central Kazakhstan. The last two wells in the 2008 drilling programme, NK5 and NK6, have encountered encouraging net oil pay intervals in Arskum and Upper Jurassic sandstone, from wireline logging evaluation.
Highlights
• Agreement signed with Canamens to farm-out up to 35% of BNG Contract Area, in which the Company has an indirect 58.4% interest, which would become an interest of 37.96% following completion of the transaction.
• US$5m of short term funding available to Roxi in January 2009
• Up to a maximum of US$50m funding for BNG work programmes to be paid by Canamens:
- Assuming the final stages of the deal are completed, this will fund Roxi’s BNG work programme commitments for 2009 and 2010
- Up to US$27m funding of 2009 BNG work programme including the drilling of multiple wells
- Up to US$23m funding of 2010 BNG work programme including the drilling of multiple wells
• Appraisal success on the Galaz Contact Area
- NK Konus well NK5 encountered a total of 20m net oil pay in Arskum and Upper Jurassic sandstone
- NK Konus well NK6 encountered a total of 29m net oil pay in Arskum and Upper Jurassic sandstone
- 2008 five well programme now completed
- Reserves upgrade and trial production planned in 2009
Rob Schoonbrood, Roxi CEO commented:
“We are delighted to work with Canamens to develop the highly prospective BNG assets. Both companies have demonstrated their ability to work together to get these deals done, and I believe that the partnership will result in a great success for the development of BNG.
Since Roxi’s IPO in May 2007, in which a total of approx $80 Million was raised, the Company has lined up more than $90 Million of additional finance to cover its commitments for the development of the extended portfolio. Of this amount only $5M is in the form of loans.
When combined with our operating successes at Galaz which could involve near to medium term production, we believe that the operational prospects for Roxi in 2009 are strong and that we are in a position to continue the monetisation of our projects. This is a significant achievement, given the current market conditions”