MXP.L Regulatory News (MXP)

1 Feb 2007 07:01

Max Petroleum PLC01 February 2007 MAX PETROLEUM PLC (AIM: MXP) UPDATED 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 an update of itsCompetent Person's estimate of resources associated with certain leads andprospects in the Group's Block E license area. The technical data utilized inthe McDaniel & Associates' review includes the Group's extensive 2D seismic datashot across Block E during 2006. The updated report estimates the risked meanprospective resources from Block E at 157.9 million barrels of oil equivalent ("boe"), calculated in accordance with the standards of the Society of PetroleumEngineers. The Group owns an 80% equity interest in the Blocks A&E license areain the Republic of Kazakhstan. Given the full extent of the Group's acreage position in Blocks A&E, theMcDaniel update reflects only a limited review of Block E, including a total oftwo out of 11 deep leads and prospects, seven out of 48 shallow leads andprospects and one out of 28 intermediate leads and prospects identified to dateon Blocks A&E. The Group's data from its 380 km2 3D seismic shoot in Block E wasnot processed and available in time to be included in the McDaniel evaluation.The Group is currently analysing the 3D data, which is generating additionalleads and prospects in Block E. The key highlights from the report prepared by McDaniel are as follows: • Risked mean prospective resources of 157.9 million boe; • Unrisked mean prospective resources of approximately 1.1 billion boe, with unrisked P90 resources of 442.5 million boe; • Kuzbak, a Permo-Triassic deep structure in the south east of E Block located some 50 kilometres north of the Tengiz field, is estimated by McDaniel to have unrisked mean prospective resources totalling 782.6 million boe, with P90 resources of 357.9 million boe; and • Kuzbak's risked mean prospective resources are estimated at 94.7 million boe. The Group's prospective resources exclude its recently released estimate of 10million boe of proved plus probable reserves in its shallow Zhana Makatdiscovery in Block E. The Group's acreage on Block A is also not included inMcDaniel's evaluation. Additionally, McDaniel is still working on an update ofthe Group's Astrakhanskiy block, which was originally considered to be highlyprospective even without the benefit of the high quality 2D seismic shot over aportion of that acreage in the fourth quarter of 2006. Jim Jeffs, Executive Chairman, commented: "The results of the McDaniel update, based on a limited number of identifiedleads and prospects on E Block, simply corroborate the fact that Max Petroleumhas a very prospective asset base with multiple and varied avenues todramatically enhance shareholder value. We have a gross acreage position of13,800 km2 in one of the most prolific hydrocarbon bearing basins in the world,which we have only just begun to explore. The biggest challenge we face is toproperly rank and prioritize our various targets, while at the same time,remaining focused on the shorter term development of our discoveries to enhanceproduction and cash flow." 1 February 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 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 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. 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