TIDMRXP
RNS Number : 7585I
Roxi Petroleum Plc
02 September 2016
Roxi Petroleum Plc
Roxi Petroleum plc ("Roxi" or the "Company")
Reserve Update
Reserves Statement for the South Yelemes Fields' Post Salt
Reservoirs, BNG Ltd LLP, Western Kazakhstan
Roxi, the Central Asian oil and gas company with a focus on
Kazakhstan, is pleased to update the market with news of a reserves
update as at 31 December 2015 of BNG's South Yelemes fields. The
reserves update covers the Company's shallow fields at its BNG
asset and does not include its deeper prospects that are subject to
drilling at its wells A5, A6 and 801.
This announcement has been posted to:
www.roxipetroleum.com/roxi/en/investors
Reserves update
Gaffney, Cline & Associates ("GCA") has conducted an
independent audit examination, as of 31 December, 2015, of the
crude oil reserves of BNG's South Yelemes fields. On the basis of
technical and other information made available to GCA concerning
this property unit, GCA has provided the reserves statement in
Table 1.
The South Yelemes fields consist of two independent hydrocarbon
accumulations (southeast and northwest). The fields are currently
in a pilot stage of production (post salt reservoirs only) and
appraisal testing and are currently producing around 600 - 800
bopd.
Roxi has confirmed to GCA that the current obligations under the
assessment licence have been fulfilled (due to expire in 2018) and
a full 25-year production licence is expected to be awarded,
running till 2043.
The reserve numbers provided below are predicated on the
progression of the company's infill drilling programme.
Table 1
Gross field Company Company net entitlement
Liquid (MMBbl) Working Liquid (MMBbl)
interest
----------------------------------- ---------- -----------------------------------
Proved Proved Proved % Proved Proved Proved
+ Probable + Probable + Probable + Probable
+ Possible + Possible
------- ------------ ------------ ---------- ------- ------------ ------------
18.1 29.3 45.0 58.41 10.6 17.1 26.3
------- ------------ ------------ ---------- ------- ------------ ------------
Notes:
1. Gross Field Reserves are 100% of the volumes estimated to be
commercially recoverable from the field.
2. Net Entitlement Reserves are the Company's net economic entitlement
3. The Operator of the South Yelemes fields is BNG Energy LLP
Hydrocarbon liquid volumes represent crude oil, estimated to be
recovered during field separation and are reported in millions of
barrels in Table 1.
The BNG Licence Area (Block) is located in Western Kazakhstan 40
kilometres southeast of Tengiz on the edge of the Mangistau
Oblast.
The Licence Area surrounds two smaller areas that are not
included in the geological allotment as they contain the West
Yelemes, Tolkyn and Saztobe Fields, operated by third parties. The
BNG Licence Area, with these exclusions, amounts to 1,561 km2 of
which 1,376 km2 has 3D seismic coverage acquired in 2009 and
2010.
GCA performed a detailed audit of the data and assumption
presented by Roxi and considers them reasonable for the estimation
of reserves; this included reservoir depth structure maps, log
data, core analysis, well tests, pilot production data and cash
flow models.
Reserves Assessment
The GCA audit examination was based on reserves estimates and
other information provided by Roxi to GCA, and included such tests,
procedures and adjustments as were considered necessary. All
questions that arose during the audit process were resolved to
GCA's satisfaction.
The economic tests for the reserves volumes were based on the
following assumptions:
-- Export Oil Price: based on the Brent crude oil price forecast
shown in the table below and further applying a discount of 10% for
the differential in quality. In addition to the transportation
costs (assumed as a part of operating costs), an additional tariff
of US$5/Tonne (US$0.67/barrel) is applied to the export oil
price.
Year Brent Crude
Price US$ per
barrel
------- ---------------
2016 40.00
------- ---------------
2017 46.80
------- ---------------
2018 51.20
------- ---------------
2019 54.10
------- ---------------
2020 55.90
------- ---------------
2021 57.20
------- ---------------
2022 57.80
------- ---------------
2023 58.00
------- ---------------
2024+ 58.00
------- ---------------
-- Domestic Oil Price: assumed to be US$48.7/Tonne
(US$6.5/barrel) for the year 2016 and thereafter is calculated by
dividing the export price by a factor of 6.6.
-- Future capital costs were derived from development plans
prepared by Roxi for the field. Recent historical operating expense
data were used as the basis for operating cost projections. No
impact of inflation has been assumed on the future costs. GCA has
found that Roxi has projected sufficient capital investments and
operating expenses to economically produce the projected
volumes.
It is GCA's opinion that the estimates of reserves at 31st
December, 2015 are, in the aggregate, reasonable and the reserves
categorization is appropriate and consistent with the definitions
for reserves in the Petroleum Resources Management System (PRMS),
which was approved by the Society of Petroleum Engineers, the World
Petroleum Council, the American Association of Petroleum Geologists
and the Society of Petroleum Evaluation Engineers in March
2007.
GCA concludes that the methodologies employed by Roxi in the
derivation of the reserves estimates are appropriate, and that the
quality of the data relied upon and the depth and thoroughness of
the reserves estimation process is adequate.
A Copy of the GCA report will shortly be available on the
Company's website at www.roxipetroleum.com
Clive Carver, Executive Chairman said
"We are naturally delighted with the reserve update. We believe
the results strongly indicate the current value of the Company is
largely covered by just the reserves from the shallow wells drilled
at South Yelemes.
We look forward to adding to these reserves with additional
drilling at the shallow fields of South Yelemes and most
importantly from our deep wells in the Ayrshagyl region.
These reserve numbers reinforce our belief that the BNG field
has enormous potential, which we continue to work to exploit in the
run up to licence renewal in June 2018. With the sharp decline in
the costs of drilling and with revenue from our producing wells at
domestic prices currently approaching $10 per barrel- significantly
ahead of the price used in the economic model, Roxi is ideally
placed to develop the BNG field to its full potential.
Comments:
Roxi Petroleum plc +7 727 375 0202
Clive Carver
Executive Chairman
WH Ireland, Nominated Adviser & Broker +44 (0) 207 220 1666
James Joyce
James Bavister
Abchurch +44 (0) 2017 398 7700
Tim Thompson / George Robinson / Rebecca Clube
+44 (0) 207 398 7700
Qualified Person
Mr. Nurlybek Ospanov, Roxi's senior geologist who is a member of
the Society of Petroleum Engineers ("SPE"), has reviewed and
approved the technical disclosures in this announcement.
Glossary
Reserves Reserves are those quantities of petroleum
anticipated to be commercially recoverable
by application of development projects
to known accumulations from a given
date forward under defined conditions
---------------- -----------------------------------------------
Proved Reserves Proved Reserves are those quantities
of petroleum, which by analysis of
geoscience and engineering data, can
be estimated with reasonable certainty
to be commercially recoverable, from
a given date forward, from known reservoirs
and under defined economic conditions,
operating methods, and government regulations
---------------- -----------------------------------------------
Probable Probable Reserves are those additional
Reserves reserves which analysis of geoscience
and engineering data indicate are less
likely to be recovered than Proved
Reserves but more certain to be recovered
than Possible Reserves
---------------- -----------------------------------------------
Possible Possible Reserves are those additional
Reserves reserves which analysis of geoscience
and engineering data include are less
likely to be recoverable than Probable
Reserves
---------------- -----------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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