BMB Reports Increase in Oil Reserves

BMB Munai, Inc. on Friday announced a summary of its annual evaluation of reserves prepared by reservoir consultant, Chapman Petroleum Engineering (Canada). The Chapman report discloses reserve increases over its prior annual report in P1 (Proven), 2P (Proven plus Probable) and 3P (Proven plus Probable plus Possible) of 11%, 24% and 18%, respectively.

Gamal Kulumbetov, BMB Chief Operating Officer stated:

"The increased reserves figures are attributable to oil flow stimulation efforts with the existing well stock on the ADE block and successful drilling results on the Kariman field in the extended territory acquired in 2004.

"We intend to concentrate our drilling efforts in the Kariman and Dolinnoe fields where our most successful wells have been drilled, with the aim of increasing production and thereby our internally generated cash flows. We will then pursue drilling exploratory wells on the Borly and Yessen structures, the two remaining structures on the extended territory, near the end of fiscal year 2008 and continuing into fiscal year 2009."

The breakout of the updated reserves is as follows:

Reserve Category             Oil         Gas       Barrels of Oil
                             (Mbbls)    (MMscf)    Equivalent

P1 (Proved)                   15,281         0       15,281
2P (Proved plus Probable)    114,984   110,224      133,358
3P (Proved plus Probable
plus Possible)               193,451   184,248      224,159

The Company also announced the filing of its Annual Report on Form 10-K for the fiscal year ended March 31, 2007. The annual report and additional details of the Chapman reserve evaluation report can be accessed on the Company website

Recapping achievements of the last year, Askar Tashtitov, BMB Munai President, noted that during the past fiscal year the Company has achieved a significant number of important performance milestones including:

  • 2007 marks the first year the Company has reached net income in excess of 1 million USD, which is a marked improvement compared to the net loss of 5.3 million USD for fiscal year 2006;
  • During 2007 the Company achieved its first positive EPS of 0.02 USD;
  • During the last fiscal quarter of 2007, the Company sold oil for an average price of 59.7 USD per barrel, which is a 29% increase over the prior fiscal quarter;
  • The Company achieved its projected 2,000 barrels per day production target during the mid-fourth quarter bringing the average production for the last quarter of fiscal year 2007 to approximately 1,600 barrels per day, which was greater than 60% increase over the previous quarter;
  • In 2007 the Company signed three new drilling contracts with Great Wall (China) for a heavy drilling rig and light workover rig, with Oil and Gas Exploration Crakow (Poland) for a heavy drilling rig, and with KandyagashBurService (Kazakhstan) for another drilling rig, which expands the Company's ability conduct concurrent drilling at three locations;
  • The Company secured from the Kazakhstan government an extension of the exploration stage term until July 2009, thus enabling the Company to remain exempt from the government's 33% Rent Export Tax during the term of the contract extension;
  • The Company's common shares were listed on the American Stock Exchange in September 2006.
  • BMB Munai is an independent oil and gas company engaged in the exploration, development and production of crude oil and natural gas in western Kazakhstan. The Company maintains administrative offices in Salt Lake City, Utah and Almaty, Kazakhstan.