Zhanros Drills Max Petroleum Out of Financial Hole
Max Petroleum Plc, an oil and gas exploration and production company focused on Kazakhstan, announces that it has entered into an agreement with Zhanros Drilling L.L.P., one of its drilling contractors, whereby Zhanros will fund up to US$7 million of drilling and workover services in exchange for ordinary shares in the Company.
Under the terms of the Agreement, Zhanros will drill up to four shallow, post-salt, wells and fund related ancillary services in exchange for up to 90,322,581 ordinary shares in the Company (“Shares”) at a price of 5p per share in lieu of cash payment. Zhanros will be issued Shares on a monthly basis as payment for the drilling and workover services provided under existing service contracts between the Company’s operating subsidiary, Samek International LLP, and Zhanros as services are completed.
The Company expects to begin drilling the BCHW-1 well on the Baichonas West Prospect using Zhanros’ ZJ-20 drilling rig currently on location. The Company is mobilising the drilling and service company personnel out to the rig and expects to spud the well in approximately one week. The Baichonas West Prospect is a four-way anticline targeting unrisked mean resources of 10 million barrels of oil in Jurassic and Triassic reservoirs with an expected total depth of 1,400 metres.
The Company has also awarded a tender to Zhanros for two additional shallow drilling rigs to facilitate the completion of the Company’s post-salt exploration programme before the March 2013 expiry of the exploration phase of its Blocks A&E Licence. Contracting and mobilising any additional shallow rigs is subject to obtaining additional financing to drill the wells.
Michael Young, President and Chief Financial Officer of Max Petroleum commented:
“It has been our top priority to get financing in place to enable us to drill the remaining shallow exploration prospects in our portfolio. We believe they are some of the best shallow prospects we have generated and it is crucial for Max Petroleum and our shareholders that we test them before the exploration period of our licence expires in March next year. The agreement with Zhanros allows us to continue with our post-salt exploration programme at a critical time as we work towards a broader financial solution.”