Well No. 11 was drilled from a pad located at its Well No. 10, angled 284m to the north-west and to a total vertical depth of 1,333m. The well was cored first from 1169m to 1175m, later from 1247m to 1259m, and subsequently logged. Based on log analysis, this well encountered the two principal sands of the Albian formation from 1167m to 1174m and 1246m to 1263m respectively, and is estimated to have a total net oil pay of 17m.
Well No. 11 offsets Well No. 10, which flowed 3,465 bopd of sweet 20? crude during a commingled test of these two Albian sands.
"We are pleased with the results of Well No. 11," stated Mr. Al Sehsuvaroglu, the Company's President and Chief Executive Officer. "We plan on skidding the rig to its next location on the existing pad and anticipate an October spud date. Well No. 12 will be angled approximately 300m to the north-east, to a total vertical depth of approximately 1,350m. We plan to equip and complete Wells 10, 11, and 12 simultaneously, and produce all three through a temporary test facility starting in December 2005 until permanent facilities, which are being assembled, are commissioned later in 2006."
The Company, through its Kazakh subsidiaries KoZhaN LLP and Vector Energy West LLP, owns Morskoe, Karatal, Dauletaly, Liman-2 and Atyrau licenses respectively. The Company received written confirmation from the Ministry of Energy and Mineral Resources of Kazakhstan (the "Ministry") stating that as of August 9, 2005, it had met its minimum work program required under its Morskoe license.
The Company received oral confirmation from the Ministry for the work programs on its remaining four licenses on September 9, 2005, but has not yet received written confirmation.
Under the Company's recent US$42 million capital raising, receipt of written approval from the Ministry for its remaining licenses was to be received by September 26, 2005 as a condition of the release of US$26,512,500 of escrow funds pursuant to the Special Warrant Indenture (the "Indenture") dated August 24, 2005, between the Company and ComputerShare Trust Company of Canada. Under the terms of this indenture, subscribers can elect to waive this release condition or have its Special Warrants Receipt, plus accrued interest, returned, in which case, these Special Warrants will be cancelled.
The Company believes that it has adequately fulfilled the work commitments on these remaining four licenses, and expects to receive Ministry approval shortly. As a result, the Company anticipates that subscribers will elect to waive the Indenture release condition.
It should be noted however, that no assurances can be given that the Ministry will treat filings made by Big Sky on its remaining licenses in a manner similar to that of its Morskoe license, and furthermore that if these remaining licenses are terminated, Management believes it will not have a material effect on the Company.
Big Sky Energy Corporation is an international oil and gas company looking to develop the worlds most prolific basins in order to become a leading low-cost finder of hydrocarbons, and is currently operating in Kazakhstan's renowned pre-Caspian basin.
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