Roxi Petroleum: Galaz Operational Update

Roxi, the Central Asian oil and gas company with a focus on Kazakhstan, is pleased to update the market with developments at its Galaz asset, in which Roxi has a 34 per cent interest.

Background

The Galaz block is located in the Kyzylorda Oblast in central Kazakhstan. The Contract Area was extended on 10 January 2011 to 179 square kilometres and now includes significant exploration upside on the east side of the Karatau fault system, as well as the NW Konys development.

Pilot production commenced on 19 January 2012 following approval of the NW Konys Pilot Production Plan from the Ministry of Oil and Gas, with emissions and flaring permits received from the relevant authorities.

The Operator of Galaz is LGI, the Korean multi-national, which has invested US$34.4 million by way of loans into the project and paid a further US$15.6 million in return for 40 per cent of the asset. A total of 30 square kilometres 3D seismic has been acquired and processed.

Previous drilling activities

Three successful wells have been drilled at Galaz since 2012

• Well NK-7 successfully tested oil at a daily rate of 186 bopd at 6mm choke size and 300 bopd at 7 mm choke size.
• Well NK-8 tested and flowed 197 bopd at 6mm choke size and 251 bopd at 7mm choke size.
• Well NK-12 tested at a daily rate of 117 bopd at 8mm choke size.

Recent activities

Roxi Petroleum Plc is pleased to announce that it has spudded Well NK-14 at North-West Konys.  The planned total depth is 1,500 meters targeting Jurassic and Cretaceous reservoirs.  Currently, drilling has reached a depth of 603 meters and is expected to be complete by the end of February.

Galaz is also planning to spud the NK-24 well in early February with planned total depth of 1,500 meters targeting Jurassic and Cretaceous reservoirs. Importantly, NK-24 will be the first well to be located on the Galaz extension area.

Aggregate potential production from the wells at Galaz

At the date of this announcement aggregate gross pilot production from the existing wells is running at 875 bopd (300 bopd net to Roxi). Roxi’s share of costs of the drilling work at Galaz is largely funded by oil sales from existing wells.

Comments:

Clive Carver, Chairman commented

“It is pleasing to see the development of Galaz continuing and in particular the first well on the extension area acquired in 2011.  While not in the same league as our prime asset BNG we believe the Galaz Contract Area to have significant value.”