MXP.L Regulatory News (MXP)

22 Jun 2006 16:33

Max Petroleum PLC22 June 2006 This announcement replaces the earlier announcement (RNS No 0369F) released at15.35 today where the title should have read "Shallow Drilling Programme". Max Petroleum ("Max Petroleum" or "the Company") Operational Update - Shallow Drilling Programme Max Petroleum (AIM:MXP) is pleased to announce that the shallow well drillingprogramme in the Block E licence area, western Kazakhstan, is expected tocommence in July. The Company expects to achieve initial production in August2006. Shallow Drilling Programme As announced on 22 May 2006, the first four shallow drilling targets have beenidentified in Block E at depths of 300 to 900 metres. The cost of these shallowwells is estimated to be US$700,000 per well, with the cost of surfaceproduction facilities being an estimated US$350,000 per well. Completionequipment for these and additional shallow wells are on schedule for delivery bythe end of June. Temporary production facilities and accommodation are underconstruction and will be available to be on site by July. Several other shallow drilling locations have been identified and are currentlybeing prioritised with a total of 10 wells to be drilled in the shallow zonesduring 2006. The location of the wells will also be dependent on the size ofeach shallow structure, based on initial drilling results, since multiple wellsmay need to be drilled in the same shallow structures before moving on tosubsequent targets. As Max Petroleum drills these shallow targets, accumulated data regarding wellflow rates, sizes of reservoirs found and updated seismic studies will bereleased to the market on a regular basis after review by Max Petroleum'sCompetent Person. Based on progress in Max Petroleum's Shallow Drilling Programme in 2006 theCompany has the sole option to extend the contract for the shallow drilling riginto 2007. Should the programme proceed as expected, Max Petroleum aims todrill a further 25 shallow wells in 2007. New Prospects and Seismic Programme Update The 2006 seismic programme is currently in progress and includes a 2D and 3Dsurvey in Block E. The main elements of this programme are as follows: • The 2D lines are expected to be completed in June 2006 and will beused to assist in identifying further leads in new areas within Block E. • The 250 square kilometre 3D survey is located over an unexploredcluster of possible shallow to intermediate traps in Block E and is expected tobe completed in July 2006. • It is likely that the 3D seismic programme will be extended andexpanded due to encouraging initial results. To date, the seismic processinghas shown a number of potentially interesting leads in the salt flanks that werenot drilled in Soviet times. • Further evaluation of these intermediate leads (typically 1,000 to3,000 metres) is currently in progress and the Company will provide a furtherupdate on this new area of exploration as soon as the appropriate review hasbeen carried out by McDaniel & Associates. Personnel Update The Company continues to be encouraged by its ability to attract high qualitystaff in an extremely competitive labour market. By the end of July, MaxPetroleum will employ over 70 personnel in Kazakhstan, of which 12 areexpatriate staff. These numbers will continue to grow as Max Petroleum movesinto its production phase. Both Karakum Drilling LLP and Nabors Drilling,operators of the shallow and the deep drilling rigs respectively, will provide afull complement of their own staff for drilling operations, which in turn willbe supervised by Max Petroleum's senior staff. 22 June 2006 Enquiries: Max Petroleum Plc Steve Kappelle T: +44 (0)20 7355 9590 Chief Executive Officer 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 W.H. Ireland Limited Paul Dudley T: +44 (0)20 7220 1666 This information is provided by RNS The company news service from the London Stock Exchange