Roxi Petroleum plc: Update on BNG / KNOC farm-out

Roxi Petroleum plc, the Central Asian oil and gas company with a focus on Kazakhstan, is pleased to announce that representatives from the existing participants in the BNG licence and KNOC have agreed well locations and secured a rig to commence drilling in December 2012.

Well locations

The main focus of the $25 million planned drilling activity at BNG will be 3 wells to be drilled, one deep well to a depth of 4,700 metres which will target the Permian/Carboniferous, and two wells to a depth of 2,800 metres which will target the Jurassic. Roxi has gathered 1,376 km² of 3D seismic over the BNG licence area. BNG has prospective resources of 202 mmbls risked and 904 mmbls unrisked.

Rig availability and spudding

Despite a general shortage of deep drilling rigs the participants have negotiated the supply of one on a turn-key basis for the 4,700 metre well.  Spudding of the deep well is scheduled for December 2012.

Farm-out update

As announced in the interim statement although the key part of the farm-out has been approved by the Kazakh authorities, Roxi and KNOC have still to resolve how to deal with a pre-condition to the farm-out agreement in relation to a switch of interest of KNOC in BNG to Galaz for which Kazakh approval has not been received and that the Board believe may not be able to be satisfied. Discussions on this matter are progressing in a constructive fashion to find an alternative mutually acceptable solution.  Accordingly Roxi and KNOC have further extended the end date of the farm-out agreement until  30 November 2012.

Clive Carver, Chairman, commented:

“We are pleased to have agreed the practical issues of well location and rig contracts. Given the risks of deep drilling we are particularly pleased to have negotiated a fixed price agreement with the drilling contractors.

We will continue to work with KNOC to find a solution to the last remaining issue to allow the drilling at BNG to commence as planned in December.”