MXP.L Regulatory News (MXP)

10 Oct 2006 07:01

Max Petroleum PLC10 October 2006 Max Petroleum Plc ("Max Petroleum" or "the Company") Operational Update Max Petroleum Plc, an oil and gas exploration and production company operatingin Kazakhstan, is pleased to provide an operational update. Drilling Programme Shallow Wells Max Petroleum plans to drill a total of 30 shallow wells up to a depth of 1,000metres by the end of 2007, of which two wells, the ZMA-1X and ZMA-2X, havealready been successfully drilled, completed and are now producing. Drillingoperations on the third well, the ZMA-4X, are ongoing. In total, the Company plans to drill five wells in Zhana Makat A this year. Thenext two shallow wells to be drilled in Zhana Makat A are ZMA-3X and the ZMA-5X,both of which are in the higher part of the structure in relation to the firsttwo wells drilled in the field. After completion of this initial five welldrilling programme, expected by November, the Company will move the rig to theadjacent Zhana Makat E prospect to drill the ZME-1X exploration well. The Company has identified nine drillable shallow prospects in Block E with 15drilling locations, and also identified 39 shallow leads, of which 20 are inBlock E and 19 in Block A. The Company's shallow leads are presently beingevaluated in order to mature them into drillable prospects. Intermediate Programme By the end of 2007, the Company now plans to drill six to nine intermediatewells, each between 1,000 to 3,000 metres in depth,. The Company has so faridentified three drillable intermediate prospects in Block E: 1. The Zhana Makat A Triassic area, underlying the Jurassic discovery recentlymade. The Triassic interval is productive in the adjacent East Makat fieldoperated by KazMunaiGas Exploration & Production; 2. The Zhana Makat D Jurassic area, to the East of the existing East Makatfield; and 3. The Akatkol-Satypaldi prospect in the south-central area of Block E. Max Petroleum has also determined 25 intermediate leads in Blocks A&E which arein the process of interpretation to determine any available drillable prospects.The Company has sourced a drilling rig and plans to accelerate its intermediateprogram to begin drilling in Block E during the first quarter of 2007. Deep Programme Blocks A&E A total of eleven deep leads have been determined so far in Blocks A&E,including the following two leads: 1. The Soltustik Teniz lead, an interpreted 4-way-closure Permian structurein the South-Eastern part of Block E. The estimated depth to top of reservoir ofthis lead is 3,650 metres, with a seismic flat spot occurring at 4,300 metresand a base at some 5,600 metres. Areal extent of this lead is estimated at some58 square kilometres. 2. The Kuzbak Deep lead, a possible Carbonate build-up in the South-Easternpart of Block E. The estimated depth to top of reservoir of this lead is some4,200 metres, with a base at some 5,450 metres. The areal extent of this lead isestimated at 152 square kilometres. Further evaluation and interpretation work is required to mature the deep leadsidentified so far into drillable prospects, and one of these drillable prospectswill be chosen for drilling in 2007. East Alibek & Astrakhansky In East Alibek, the Company continues to be on schedule to spud the EA-1X wellin December 2006. The Company has a rig under contract to drill three deep wellsand expects to spud the EA-1X well in the East Alibek license area in December2006. Max Petroleum has also completed the acquisition of approximately 70% ofthe 400 kilometres of 2D seismic it plans to acquire on the Astrakhanskiy Blockduring 2006 and has begun processing the acquired data. We expect to begindrilling a deep well in the Astrakhanskiy Block before the end of 2007. Production Update The ZMA-1X well continues to produce some 225 barrels of oil per day, with theproduction rate being currently constrained by the size of the pump. The Companyis sourcing larger pumps which it anticipates will increase the productivecapacity of subsequent wells drilled into the Zhana Makat A structure. The ZMA-2X well put on production on September 30 2006 is already producing inexcess of 100 bopd, while we gradually increase the pump speed to optimizeproduction. We will provide a production update once a stable rate has beenachieved. Jim Jeffs, Executive Chairman, commented: "Max Petroleum has made excellent progress in a short period of time. Timelyplanning has allowed the Company to begin its shallow drilling program, make itsfirst discovery and sell its first oil, all within 10 months of commencingoperations. Quantity and quality of prospects continue to be encouraging, and wecontinue to expect to be producing 2,500 barrels of oil per day at the end of2006." 10 October 2006 Enquiries: Max Petroleum PLC Michael B. Young T: +44 (0)20 7355 9590 Chief Financial Officer Peter Moss T: +44 (0)7834 572837 Investor Relations 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.com WH Ireland Ltd Paul Dudley T : +44 (0) 20 7220 1666 E : paul.dudley@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