Roxi Petroleum Falls Amid Price Limits In Kazakhstan
Oil & gas group shares fall as it tells investors it will not be able to charge full prices until 2018.
Shares in Roxi Petroleum PLC (LON:RXP) drifted after the Kazakhstan-focused oil & gas company said it would have to sell at the former Soviet republic’s domestic prices until 2018.
The stock fell 0.5p, or 4.9%, to 9.62p after Roxi said oil produced at its BNG site in western Kazakhstan under the current licence must be sold at about US$10 a barrel.
It said: “Even at these reduced prices the pay-back periods from shallow wells are, if successful, less than 12 months.”
Roxi hopes to turn its current BNG licence into a production licence in 2018, at which time it will be able to sell at global prices.
Aggregate shallow well production from BNG for the period totalled 62,000 barrels of oil per day.
The company said it was on track to hit work programme commitments, targeting renewal of BNG licences to production licences from June 2018.
Chairman Clive Carver said: “The very strong potential of the shallow fields at BNG has been independently confirmed in the recent Gaffney Cline & Associates reserve report and in the board’s opinion, the BNG shallow fields assessed have great value on their own.
“The much greater potential of our Ayrshagyl deep field and possibly of further shallow fields remain to be independently quantified.
“The company continues to work through its drilling plan to achieve this at an early stage and success here could be viewed as entirely upside.
“The group has limited external debt and will, should the proposed merger with Baverstock be completed as expected in the next couple of months, own up to 99% of what the board considers to be one of the most exciting prospects in Kazakhstan.”