Roxi Raises Funds for Kazakh Drilling Campaign

Kazakhstan-focused Roxi Petroleum announced Tuesday that it has arranged a $40 million equity fund raising that it plans to fund its work program in the country.

The deal with Kairat Alpamysovic Satylganov – a successful Kazakh businessman and investor – will likely see him join the board of Roxi. The first $10 million will be paid on Jan 31. In exchange for the issue of new Roxi shares, while the remaining $30 million will be called down as required to fund the company's work program.

Roxi plans to use the bulk of the new funds in its BNG Contract Area, which covers a 600-square mile area of low lying Steppe and transition zone at the edge of the Caspian Sea, in the Mangistau Oblast in Western Kazakhstan. Here, the company plans to drill three deep wells and two shallow wells in 2013.

Roxi also confirmed Tuesday that it has already completed the bulk of the preparatory work for two of these deep wells and expects to spud the first in March this year. Drilling on the second deep well will begin in July.

Analysts who follow Roxi, whose shares are quoted on London's Alternative Investment Market, viewed the deal as positive for the company since it now has access to capital to fund its operations.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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