Max Petroleum’s oil production and sales rise in first half

Nov 14. Proactive Investors UK

By Sergei Balashov

Max Petroleum's oil production and sales rise in first halfMax Petroleum (LON:MXP) reported an increase in both production and oil sales for the first six months of the current financial year and told investors to expect further increases in its reserves.

In the report, the Kazakhstan focused oil and gas firm highlighted the two commercial discoveries made at the East Kyzylzhar I and Sagiz West fields and a 67 percent increase in production to around 3,500 barrels of oil per day (bopd). The company expects to have all six of its commercial discoveries on production by the end of the year.

The company has also raised its proved and probable (2P) reserves by 70 percent to 13.3 million barrels (mmbbls) plus an additional 1.5 mmbbls of possible reserves and 61.3 mmbbls of contingent resources in place relating to the Sagiz West discovery.

Today Max told investors that it expects further increases in its 2P reserves as it places new fields on test production and drills additional appraisal wells to delineate the fields.

In other news, oil sales reached 421,000 barrels during the first six months to end September, up 11 percent from the same period of 2010.

However, while sales volumes rose, average realised price dropped 11 percent to US$57.93 per barrel and, as a result, revenues declined from US$24.7 million a year earlier to US$24.4 million.

Despite the decline in revenues, Max managed to reduce its losses from US$13.3 million to US$0.4 million.

Max Petroleum investors are currently waiting for updates from the “high impact” NUR-1 well on the Emba B prospect in Block E in Kazakhstan, which was spudded earlier this month.

The well, which will target Devonian and Carboniferous reservoirs with unrisked mean resource potential of 467 million barrels of oil equivalent and a 29 percent chance of success, was labelled as “the big one” by broker Merchant Securities.

Shares in Max traded at 13.25 pence this morning, unchanged from Friday’s close. The company currently has a market cap of ?134.06 million.

Max Petroleum is an independent oil and gas exploration and production company focused on Kazakhstan. The Company is a public limited company incorporated in the United Kingdom and listed on AIM. The Company holds a 100% interest in Blocks A&E Licence area covering over 12,455 km2 in the highly prolific Pre-Caspian Basin in Western Kazakhstan. The Pre-Caspian Basin has produced some of the world’s largest oil and gas discoveries, including the super-giant Tengiz, Kashagan, Karachaganak and Astrakhan fields, which range in size from seven to 20 billion barrels of oil equivalent in recoverable reserves.