The Ministry of Energy and Mineral Resources of the Republic of Kazakhstan awarded the extension to Victoria's subsidiary Olager Oil LLP. The license exploration period will now be extended until May 2007. In the event of a commercial discovery, the license will be extended for a production period of a further 19 years.
Victoria and NEK Services LLP are now able to begin preparations for the drilling operations in the Tamdykol oil project, as per the farm-out agreement signed in May 2005. Under the terms of the agreement, NEK will finance and perform the US$1.25 million minimum work program over the next two years, including the processing and reinterpretation of seismic and other geological data, drilling of four exploratory wells to target depth of 500 meters and construction of key facilities to support development.
Drilling of the first test well at Tamdykol is expected to begin in late August, following the obtaining of all necessary permits. Drilling of a second well and the geological data collection is then anticipated in late September.
Tamdykol, a five square kilometer license area in the post salt-depth region of the Emba oil and gas province of the Pre-Caspian basin, was acquired by Victoria from Celtic Resources Holdings Plc in August 2004. Prospect drilling on the Sagiz Block of Emba, to which Tamdykol belongs, has so far yielded several oil and gas discoveries. Potential recoverable C3/D1 resources are estimated at approximately 34 million barrels of oil beneath a sub-salt overhang.
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