Max Petroleum to Speed Up Exploration

Max Petroleum PLC

Max Petroleum PLC said that it will accelerate its exploration programs in respect to highly prospective intermediate-depth structures identified in its Blocks A&E acreage in Western Kazakhstan.

The recent seismic campaigns carried out by Max Petroleum on its A&E Blocks in 2005 and 2006 have been extensive, with 1,480 kilometers (km) of new 2D seismic completed and 380 km of 3D seismic currently 60% complete. The seismic, coupled with large volumes of historical data, has allowed for the identification of several attractive leads at intermediate depths, both on the flanks of salt domes and in the areas between them.

This is particularly interesting and prospective because the vast majority of Soviet-era exploration in Max’s A&E blocks was directed toward shallow sections within specific small areas in the blocks. In addition, four deep wells were drilled in attempts to test the pre-salt section. However, no exploration was targeted to intermediate depths of between 1,000 and 3,000 meters (m).

As an example of the obvious prospectivity of the intermediate plays, Max has identified oil in two zones in the Soviet-era deep Zharbas P-2 well, drilled in 1982, which was never tested. The well logs show two very interesting sections, one 18-m-thick oil-bearing sand in the Jurassic at 1,116 m and another 12-m oil-bearing sand in the Permo-Triassic at 1,890 m. The company is investigating the feasibility of using the drilling rig contracted for the purpose of drilling shallow wells in Block E to drill the Jurassic section in this area in the near future.

The identification of this prospect is an obvious starting point for an aggressive intermediate-depth exploration program. Other leads have been identified in the intermediate section in the area surrounding the P-2 well and in several other areas in the A&E blocks. Each intermediate structure is estimated to have recoverable reserves from around 50 million to more than 150 million barrels based on initial analysis by Max Petroleum engineers.

The estimates are subject to verification by Max’s competent person, McDaniel & Associates, and a further update will be provided in due course. This makes them economically very attractive targets; the pressures expected at these depths would mean good flow rates and un-assisted flow. In addition, the oil would be expected to be relatively light and free of sulfur--and thus attractive for production, processing, and transport purposes.

Max Petroleum is in the process of evaluating several of these intermediate structures and will bring in additional geological/geophysical and drilling personnel within the short term to fast track this effort. This accelerated intermediate exploration program will be in addition to the already established programs for the shallow and deep sections of the company’s blocks and will run in parallel with these programs. It is expected that intermediate drilling can thus be accelerated from the fourth quarter 2007 to early in the second quarter 2007 at the latest, with no impact on the timing of the company’s other exploration programs.