Max Petroleum to ramp up Kazakh production

April 1. Interactive Investor

Max Petroleum to ramp up Kazakh productionBritish oil explorer Max Petroleum (MXP) is forecasting a substantial ramp up in production and revenues in the near-term as it brings on stream more wells in the Republic of Kazakhstan.

The AIM-listed group said it plans to bring on additional appraisal and development wells in Zhana Makat, Borkyldakty and Uytas as part of its plans to increase exploration, appraisal and development activity this year.

The bullish outlook came as the company announced the successful drilling of an exploration well on the Asanketken prospect in Block E.

The ASK-1 exploration well reached an intermediate depth of 2,000 metres with electric logs indicating 24 metres of net oil pay at depths of 1,230 to 1,302 metres in the Jurassic formation.

The company hailed the reservoir quality as “excellent”, with porosities ranging from 17% to 33%, while a fluid sample taken from a depth of 1,278 metres yielded 45 degree API oil.

Max Petroleum, which plans to drill the well to a total depth of 3,300 metres, to evaluate the primary exploration targets in the lower Triassic section, said current mapping and pressure data suggest that the Jurassic reservoirs, a secondary objective in the well, are expected to be commercially viable.

“We are encouraged to see high quality oil pay in the Jurassic section in Asanketken, which lowers the risk of charge for the well’s primary objective in the lower Triassic,” said executive co-chairman Robert Holland.

Separately, the company has procured two additional drilling rigs.

It has entered into a two-year contract with PM Lucas for a rig capable of drilling to 3,200 metres and said it is currently mobilising to drill the NARS-1 exploration well on the Narmundanak South prospect in Block E, which is expected to spud later this month.

It intends to drill three confirmation wells at Uytas with the rig subsequent to drilling the NARS-1 well, it added.

It has also awarded a tender to Saipem, a subsidiary of ENI, for a rig to drill its deep pre-salt exploration programme and expects to execute a drilling contract shortly, it added. The first pre-salt well, NUR-1, in Block E is expected to start drilling in August, targeting unrisked mean resource potential of 467 million barrels of oil equivalent.

Analysts at Fox Davies Capital commented: “This positive preliminary result validates the trapping model that has emerged from the past exploration in the region and the most recent and on-going exploration drilling campaign by Max.

“The quality of the reservoir and of the oil in the secondary Jurassic objective is also very encouraging, with the primary Triassic objective yet to be drilled. Max has several similar prospects in the portfolio and we view the chance of success of those prospects as very good.

“The firming-up of plans for the drilling of the pre-salt play is also excellent news and should have a positive impact on the stock today.”