Canamens farms into Roxi's Kazakhstan BNG license

Uchenna Izundu
International Editor

LONDON, Jan. 20 -- Roxi Petroleum PLC has brought in Canamens Energy Ltd. as a farm-in partner for its BNG contract area in Kazakhstan.

Canamens has agreed to acquire as much as 35% of the BNG contract area in exchange for funding the $50 million work program. This would cover spending as much as $27 million on drilling several wells in 2009 and up to $23 million in 2010, again for multiple wells.

Roxi said the partnership would focus on reserves growth and early production.

The acreage covers 1,561 sq km in the South Emba subbasin of the Precaspian basin in the Mangistau Oblast. It is 40 km from vast Tengiz field, with exploration opportunities at Jurassic, Triassic, Lower Permian, and Middle Carboniferous levels.

Once the deal is completed Roxi's stake would reduce from 58.4% to 37.96%. Canamens will provide $5 million in short-term funding to Roxi this month.

The agreement builds on an earlier farmin with Canamens for its Ravninnoe contract area in 2008.

NW Konus field
Roxi also confirmed net oil pay within its appraisal wells in NW Konus field within the Galaz contract area in the Kyzylorda Oblast of central Kazakhstan. In total, five appraisal wells were drilled in the field, revealing a new geological model.

"The last two wells in the 2008 drilling program, NK5 and NK6, have encountered encouraging net oil pay intervals in Arskum and Upper Jurassic sandstone from wireline logging evaluation," Roxi said.

The NK5 well, which reached a TD of 1,410 m, encountered a 20 m net oil pay in Arskum and Upper Jurassic sandstone. The well currently is being prepared for completion and a 90-day test period.

The NK6 well reached a TD of 1,265 m and struck a 29 m of net oil pay in Arskum and Upper Jurassic sandstone. Roxi said it will carry out further evaluation.

Rob Schoonbrood, Roxi chief executive, said that since its initial public offering in 2007, where it raised $80 million, the company has secured than $90 million of additional funding to develop its assets. Of this amount, only $5 million are loans.

Schoonbrood also said the company's operating successes at Galaz could involve near-to-medium-term production.

Roxi will look at upgrading the reserves of Konus and carrying out trial production later this year, it said.

Contact Uchenna Izundu at [email protected].