In return KMGEP will provide Samek with copies of all of its data relative to Block E. This data will be of significant benefit to Max Petroleum in correlating well logs with seismic data and in finding suitable locations for well re-entries and/or new shallow wells in existing oil accumulations, within a short space of time. In addition, the cooperation agreement will provide Samek access to KMGEP's oil treatment facilities for annual production volumes of over 2 million barrels of oil per year for the period 2006 through 2010, with privileged access thereafter at the nominal cost of oil treatment. Joint geological surveys with KMGEP and Samek will also be considered.
Following the January 31, 2006 Operations Report, Max Petroleum can advise that the initial seismic program has now been completed. As a result of field processing and further interpretation of the seismic data, several different play types have been found and there is now an inventory in excess of 50 supra-salt (shallow) potential drilling targets, that are typically at depths of 350 to 900 meters, with some believed to extend to depths of 2000 meters. Max will be moving on to fully process the seismic, mature the leads into prospects, and then high-grade the prospects with a view to start drilling a number of shallow prospects in late Q2 / early Q3 2006. These new leads are separate to the larger identified pre-salt structures analogous to Tengiz and Kairan fields. The Tengiz field is 50 kilometers south of E Block, while Kairan is 20 kilometers south west of E Block.
Jim Jeffs, Chief Executive Officer, commented:
'Max is delighted to formalize its cooperation with KazMunaiGas, the State oil company of Kazakhstan, and looks forward to continued cooperation in the future. We are excited about the short-term prospectivity with over 50 shallow leads identified already, with processing on E Block still to be completed and all of the processing on A Block yet to take place.'
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