Max Petroleum to Begin Shallow Drilling Program in Western Kazakhstan
Max Petroleum reports that the first 4 shallow drilling locations in the Company's Block E license, Western Kazakhstan have been identified. The choice of locations has been made on the basis of reprocessed Soviet and new 2005 2D seismic, combined with additional 3D seismic data received from KazMunaiGas, the state owned oil and gas company, as part of its Cooperation Agreement with Max Petroleum. All four locations in Block E have been successfully inspected and confirmed suitable for drilling operations.
The indicative 'Stock Tank Oil Initially In Place' (STOIIP) for the first 4 targets is encouraging and will be verified by Max Petroleum's independent Competent Person, McDaniel & Associates, as soon as Max's in-house work has been finalized. A further 6 drilling locations in Block E are in the process of being selected, with their locations partially dependent on the drilling results of the first 4 wells.
A contract has been signed with local contractor Karakum Drilling LLP for the provision of a fully equipped Cardwell KM-200 mobile drilling rig, together with accommodation facilities for 70 personnel. The rig is capable of drilling and completing wells to a depth of 1000 meters, which is sufficient for Max Petroleum's shallow drilling program, as the targets range from 300-900 meters. The rig is "winterized" to allow year round operations in Western Kazakhstan.
The initial contract period covers the drilling and completion of up to 10 [shallow] wells in Block E, which may be extended at the exclusive option of Max Petroleum. It is expected that the rig will commence operations early Q3 2006. Once the shallow drilling program commences, Max Petroleum will provide shareholders with regular operational updates on progress.
This shallow drilling program will run in parallel with Max's deep drilling program, which will commence in the Q4 2006 with the first well in the East Alibek Block. The extended seismic program in Blocks E and Astrakhanskiy is currently underway.
Jim Jeffs, Chairman of Max Petroleum, commented:
"I am pleased that we have signed a rig contract for an extensive shallow drilling program in this tight market environment. Initial analysis of data, still subject to confirmation from the Company's independent Competent Person, is extremely encouraging and we remain on track to achieve first production by early Q3 2006.
I would like to take this opportunity to praise the operational team for all their hard work with the preparation of the shallow well drilling program."
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