MXP.L Regulatory News (MXP)

2 Apr 2007 07:03

Max Petroleum PLC02 April 2007 MAX PETROLEUM PLC (AIM: MXP) ASTRAKHANSKIY RESOURCE ESTIMATES FROM McDANIEL & ASSOCIATES Max Petroleum Plc ("Max Petroleum" or "the Group"), an oil and gas explorationand development company focused on Kazakhstan, today provides the results of itsCompetent Person's estimate of resources associated with certain leads andprospects in the Group's Astrakhanskiy license area. The technical data utilizedin the McDaniel & Associates' review included approximately 445 kilometres of 2Dseismic data shot across the western portion of the Astrakhanskiy acreage duringthe fourth quarter of 2006. The report estimates the geologically risked meanprospective resources from four prospects and leads at 559.5 million barrels ofoil equivalent ("boe"), calculated in accordance with the standards of theSociety of Petroleum Engineers. The key highlights from the report prepared by McDaniel are as follows: •Risked mean prospective resources of 559.5 million boe, including 174.6 million barrels of condensate and 2.3 trillion cubic feet ("tcf") of natural gas using a conversion factor for gas to liquids of 6:1; •Unrisked mean prospective resources of approximately 1.1 billion boe, with unrisked P10 resources of 2.3 billion boe and P90 resources of 312.6 million boe; and •The largest structure identified in Astrakhanskiy was estimated by McDaniel to have 457.6 million boe of mean risked resources, including 1.9 tcf feet of natural gas and 142.9 million barrels of condensate. Unrisked mean resources are estimated at 794.5 million boe, with unrisked P10 resources of 1.7 billion boe and P90 resources of 194.9 million boe. Jim Jeffs, Executive Chairman, commented: "The results of the McDaniel report are extremely encouraging and verify ourexpectations about the prospectivity of the western portion of our Astrakhanskiyacreage. The average geological chance of success is approximately 50%, which weconsider to be very favourable for an exploration block with such large resourcepotential. We have shot 2D seismic across 35% of the license area and have anentirely different structure on the eastern portion of the block, which couldprove to be highly prospective as well. We believe the results further supportour confidence that there are very substantial opportunities across ourportfolio of assets, which we intend to methodically and pragmatically exploitfor the benefit of our stockholders." 2 April 2007 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 Merlin Tom Randell T: +44 (0)20 7653 6620 David Simonson WH Ireland Ltd Paul Dudley T :+44 (0) 20 7220 1666 James Joyce E :paul.dudley@wh-ireland.co.uk james.joyce@wh-ireland.co.uk Henrik Busk, Petroleum Engineering and Geology Manager of Max Petroleum, aPetroleum Geologist, is the qualified person who reviewed and approved thetechnical information contained in this announcement and Bryan Emslie, PetroleumEngineer and Senior Vice President of McDaniel & Associates, is the qualifiedperson who reviewed and approved the technical information relating to theupdate from McDaniel. Glossary Proved Reserves Proved reserves are those quantities of petroleum, which by analysis ofgeological and engineering data, can be estimated with reasonable certainty tobe commercially recoverable, from a given date forward, from known reservoirsand under current economic conditions, operating methods, and governmentregulations. If deterministic methods are used, the term reasonable certaintyis intended to express a high degree of confidence that the quantities will berecovered. If probabilistic methods are used, there should be at least a 90percent probability that the quantities actually recovered will equal or exceedthe estimate. Probable Reserves Probable reserves are those unproved reserves which analysis of geological andengineering data suggest are more likely than not to be recoverable. In thiscontext, when probabilistic methods are used, there should be at least a 50percent probability that the quantities actually recovered will equal or exceedthe sum of estimated proved plus probable reserves. Risk - Risk is defined as the probability of loss or failure. In the oil andgas industry, risk is commonly applied to the estimation of prospective(undiscovered) resources to account for the possibility that the outcome ofdrilling a well may not be successful. Risk is defined through the termgeological chance of success which considers the geological factors that willresult in the formation of a hydrocarbon reservoir with sufficient quality toallow for sustained flow rates of oil or gas. Prospective Resources Prospective Resources are those quantities of petroleum which are estimated, ona given date, to be potentially recoverable from undiscovered accumulations. Unrisked Resources - Unrisked prospective resource volumes are commonlycategorized as Unrisked P90, P50, P10 or Mean Resources and are estimated beforemultiplying by the geological chance of success which assumes that the drillingof an exploration well is successful. Risked Resources - Risked prospective resource volumes are commonly categorizedas Risked Mean Resources and are calculated by multiplying the unrisked meanresources by the geological chance of success to account for the risk ofdrilling an unsuccessful exploration well. P90 - The quantity for which there is a 90% probability that the quantitiesactually recovered will equal or exceed the estimate. In reserves estimation,this is the number quoted as the proven value. P10 - The quantity for which there is a 10% probability that the quantitiesactually recovered will equal or exceed the estimate. In reserves estimation,this is the number quoted as the proven value. Mean - The mean is also known as the expectation or expected value. It is theaverage over the entire probability range, weighted with the probability ofoccurrence. This information is provided by RNS The company news service from the London Stock Exchange