In January 2009 the Company announced it had entered into a conditional farm-out agreement with Canamens for part of its holding in the BNG Contract Area. Pending completion of the conditions precedent, Roxi is pleased to announce that, agreement has been reached with Canamens to advance US $3 million of the optional US $27 million 2009 BNG work program payment. Completion of the funding is expected within the next few days, and will ensure continued seismic and well planning operations on the block until June 2009.
As previously announced the farm-out agreement of part of Roxi's holding in BNG is subject to shareholder approval and for which the Company will convene a general meeting.
Short term operational delays have been encountered in the company's Exploration Contract operations, in Ravninnoe, BNG, and Galaz due the atypical weather conditions in February and March this year. Heavy snow in the Ravninnoe and BNG areas in February was followed by an extremely mild March resulting in poor surface conditions from excess water and mud, which restricted access to Ravninnoe field , and slowed down seismic acquisition on BNG. Much the same conditions have hampered operations in Galaz, where a mild March and resultant thaw has restricted access and delayed testing of the appraisal wells NK3, NK4, NK5, and NK6.
Looking forward, the rescheduling of operations for 2009 is as follows:
The spud of appraisal well #20 is now targeted for July 2009, and anticipated to take 65 days.
Completion of the 3D seismic acquisition is now targeted for June 2009. An initial block of approximately 50% of the seismic cube has been fast tracked for Time Migration Processing to avoid delaying the drilling of three wells on the Yelemes 54 discovery in the second half of 2009. The final Depth Processing of the full dataset is not anticipated before September 2009.
The company has completed sales/delivery agreements with neighbouring operating company, KuatAmlonMunai LLP (KAM), to receive the test production at the their Konus field facilities. Wells NK3, NK5 and NK6 are shut-in waiting to test. Surface conditions have improved in the field and start of test production is now expected later this month. Roads to all wells will be installed as soon as practical. Well Nk4 is currently swabbing dry oil, and if unable to establish flow naturally will be put on to pump in May 2009.
Wells NK1, 26, and 27 await work-over until the project moves into Pilot Production later this year.
Reserves upgrade for the NW Konus field will be delayed until mid 2009, following completion of initial testing of the wells.
Rob Schoonbrood, Roxi CEO commented, "Despite short term delays caused by the mild spring the 2009 work program is still on schedule, with planning in place to drill between four and eight wells across our assets, in the second half of the year. We are delighted to see the initial advance payment by Canamens to help maintain momentum in the highly prospective BNG assets."
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