Arawak Energy Limited announced that the government regulatory authority in Kazakhstan, the Central Committee for Development, has approved the technical plans of development for the Akzhar and Besbolek oil fields allowing the Company to transition from the exploration phase to the development phase for these blocks.
Previously shut-in wells are already being put on production and drilling will re-commence shortly. Earlier in the year, development drilling at Akzhar and Besbolek was suspended and some production shut in due to regulatory constraints imposed during the approval process of the technical plan of development.
The Company has contracted four drilling rigs to work on Akzhar and Besbolek, and drilling of the first new well will begin at Besbolek in the next few days. By mid-October, all four rigs are expected to be active, with a ten well drilling programme for each block to be completed by year end.
Alastair McBain, Arawak's President and Chief Executive Officer, commented, "This is an important milestone in the development of Akzhar and Besbolek, our most prolific assets in Kazakhstan and the most immediate source of growth for our production stream. Our team has responded quickly in commencing the re-opening of shut-in production and starting up an aggressive drilling program which will add new production and resume strong growth."
During the approval process of the technical plan of development, the State Committee for Reserves in Kazakhstan approved the Company's C1 plus C2 State Balance Reserves for Akzhar and Besbolek at 51.3 million barrels and 12.1 million barrels, respectively.
The State Balance Reserves were prepared by a Kazakhstan engineering institute and form the basis of the production plan approved by the State. The State Balance Reserves methodology is not consistent with the definitions and standards set out in the Canadian National Instrument 51-101 ("NI 51-101"), according to which the Company's oil and gas reserves are evaluated on an annual basis, and prepared by qualified independent reserve auditors as defined under NI 51-101. C1 plus C2 reserves are not equivalent to the proved plus probable reserve classification under NI 51-101. In accordance with NI 51-101, proved plus probable reserves as of 31 December 2007 for Akzhar and Besbolek were 23.4 million and 7.9 million barrels of oil respectively, but do not take into account work undertaken in 2008.
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