MXP.L Regulatory News (MXP)

14 Sep 2006 07:01

Max Petroleum PLC14 September 2006 MAX PETROLEUM PLC (AIM: MXP) FIRST WELL SUCCESS Max Petroleum Plc ("Max Petroleum" or "the Company"), an oil and gas explorationand development company operating in Kazakhstan, is pleased to announce thesuccessful completion of drilling of its first shallow exploration well on theZhana Makat prospect in the E Block. Zhana Makat A - first shallow well successfully drilled, delivering immediateproduction The Mak A1-X well was successfully drilled to a total depth of 1,000 metres (m)and a 23m oil column was encountered in sands from a depth of 812m to theoil-water contact at 835m. The well has been successfully completed and, while it is currently in the cleanup phase, it is producing approximately 200 barrels of liquid per day with anaverage base, sediment and water ratio ("BS&W") of 10%, giving a current oilproduction rate of 180 barrels of oil per day ("bopd"). As the well cleans upover the next few days, the BS&W is expected to decrease (there is no indicationof formation water) and the pump speed will gradually be increased to itsmaximum rate. The oil is a high quality 35 API gravity crude, which is similarto analogous production from the area. The Company is continuing to evaluate thewell and is conducting additional flow tests in order to optimise its dailyproduction rate. Separately, Max Petroleum has initiated construction of a temporary productionfacility in order to process the production from the current well, as well asfuture wells on the same structure. Oil lifting and sales contracts for theCompany's early production are being negotiated and finalised. Near Term Shallow Well Programme (S) Zhana Makat A Max Petroleum commenced drilling a second well into the same structure thisweek, and will drill additional wells to further define the size of the ZhanaMakat A structure and fast-track early production. Following the interpretationof the 3D seismic data acquired by the Company, Max Petroleum estimates theareal extent of the Zhana Makat A reservoir to be a minimum of 2.5 squarekilometres (km2). Following the completion of the initial drilling programme, which is expected tolast through mid-November 2006, the Company's stock tank oil initially in place("STOIIP") and mean recoverable reserves in the Zhana Makat A structure will becertified by the Company's independent advisors, McDaniel & Associates. (S) Zhana Makat E and Zhana Makat D Max Petroleum also announces today that it has identified two other prospects inthe Zhana Makat area of Block E: o Zhana Makat E, which based on our estimates appears to have an arealextent of 1.5km2 and is likely to be hydrocarbon bearing from a depth of 815m.We expect that Zhana Makat E will be drilled later this year following thecompletion of the additional wells within the Zhana Makat A structure. o Zhana Makat D, which based on our estimates appears to have an arealextent of 3.5km2 and is likely to be hydrocarbon bearing from a depth of 1,320m. Jim Jeffs, Executive Chairman, commented: "The 23 metres of net oil pay encountered in the first well into the first ofnumerous structures in the Company's acreage is very encouraging and serves tovalidate our geological thesis, field development plan and overall assetprospectivity. It is also a testament to the quality of our staff on the groundin Kazakhstan. The start of production from our large and promising asset base marks animportant milestone. As envisaged, Max Petroleum will now diligently pursueshort-term reserves to drive production growth while preparing for high impactdeep exploration wells. With in excess of 50 shallow leads, numerous intermediate and deep leads andprospects, and under the operational leadership of our highly capable andqualified staff, Max Petroleum is well positioned for future growth." 14 September 2006 Enquiries: Max Petroleum PLC Steve Kappelle T: +44 (0)20 7355 9590 Chief Executive Officer Peter Moss Investor Relations T: +44 (0)20 7355 9590 Manager Pelham Public Relations Charles Vivian T: +44 (0)20 7743 6672 E : Charles.vivian@pelhampr.com Alisdair Haythornthwaite T : +44 (0) 20 7743 6676 E: Alisdair.haythornthwaite@pelhampr.comWH Ireland Ltd James Joyce T : +44 (0) 20 7220 1666 E : james.joyce@wh-ireland.co.uk Henrik Busk, Petroleum Engineering and Geology Manager of Max Petroleum, aPetroleum Geologist, is the qualified person that has reviewed and approved thetechnical information contained in this announcement. This information is provided by RNS The company news service from the London Stock Exchange