BMB Munai Acquires Stake in Emir Oil
|Thursday, May 27, 2004
BMB Munai has signed an agreement to purchase the 30% interest of its minority partner in Emir Oil, LLP, a Kazakhstan company (Emir). The acquisition is being made in exchange for 3,500,000 common shares of BMB Munai. As a result of the acquisition BMB Munai will be the sole owner of Emir. Emir holds a hydrocarbons exploration contract from the Government of the Republic of Kazakhstan over the Aksaz-Dolinnoe-Emir (ADE Block) oil and gas field in the Mangistau oblast in Kazakhstan.
BMB Munai's President Dr. Alexandre Agaian said, "We are pleased to conclude this acquisition. It evidences the confidence which our partner has in the ability of BMB Munai to expand development of the oil and gas exploration and production opportunities in the ADE Block as well as direct the company to new oil and gas ventures in the future."
BMB Munai made its initial acquisition of a 70% interest in Emir in June of 2003. Since that time the company has assumed management of Emir and responsibility to raise the required investment capital, conduct seismic studies and construct field infrastructure in the ADE Block.
BMB Munai completed a private round of financing in November 2003, using the services of Credifinance Securities Limited of Toronto, Canada and ATON Capital of Moscow, Russia as placement agents. In December 2003, the company announced completion of a 3D seismic survey of the ADE Block by PGS-GIS. In the first calendar quarter of 2004, reworking and testing on the Dolinnoe-1 and Emir-1 oil wells was completed and test production was sold. In May 2004, PGS-GIS issued its preliminary engineering report on the ADE Block oil reserves.
On May 12, 2004, the company began test production at the Dolinnoe-1 well.
During test production the well will be tested with different choke diameters and different modes. On initial tests using both 6 and 8 mm chokes the Dolinnoe-1 well yielded results to support expected outflows averaging 500 barrels per day with the surface pressure of approximately 46MPa. The company anticipates that additional funding will be pursued on a private placement basis to pursue expansion plans as the need arises using the services of the same placement agents.