Transmeridian Exploration Inc. has received confirmation of the additional reserve potential with the expansion of its South Alibek License Area. The expanded license area allowed the company to include the known extension of the South Alibek structure. The new license area allows for a maximum field area of about 9200 acres which are now estimated to have ultimate recoverable reserves of as much as 378 million barrels. This estimate was confirmed by work recently completed by the Ryder Scott Company, one of the largest, oldest and most respected reservoir-evaluation consulting firms in the petroleum industry. The previous engineering estimates gave us maximum ultimate recovery on about 220 million barrels and the new area increases this level to 378 million barrels. "This confirmation by our outside engineers of our previous estimates gives us the confidence to forge ahead with our early oil testing and production program," commented the company's President Lorrie Olivier. "Also, the installation of the drilling equipment, testing and early production and treating facilities are expected to be completed on schedule."
Transmeridian Exploration has also received notice from the Kazakh government for approval of commercial reserve status for the field, thus allowing the company to obtain a production contract. The new reserve classification to commercial reserves allows the company to now convert its Exploration operating contract to an Exploration and Production operating contract, which would encompass a work program for the development of the field.