Saturday 15 May 2010

Roxi Petroleum Announces Operational Update

On 10 May Roxi Petroleum (LSE:RXP, AIM:RXP, RXP.L) announced an operational update covering the BNG, Ravninnoe and Galaz blocks.

BNG

Well 805 is drilling ahead towards the target depth of 2,500m after setting 9 5/8 inch casing at 803m .  The 16 April RNS said that well 805 spudded on 14 April, with an expected drill time of some 30 days.  It therefore appears that there have been some delays in drilling, and we can expect to wait for some time longer for the announcement of the well result.

On a brighter note, the extra 3-D seismic over the northern part of the block has been completed and priority is being given to processing and interpreting the data over the Northern Yelemes area.  Seismic acquisition over the southern area of the block, presumably covering the Saztobe area, has commenced.

Ravninnoe

A period of 90-day production testing has begun on Well #20, and it seems that acid stimulation will also be part of the test programme.

Galaz

It seems that the initial attempts to perforate the NK22 well have failed due to water ingress caused by a poor cement bond.  Plans are being prepared to conduct a cement squeeze and re-perforation of the well.  However, Galaz Energy BV (Galaz), will have to wait for approval to carry out these operations fromthe new operator, LG International (LGI).  It seems LGI will be awarded the operatorship of the block as part of the deal announced on 29 April.  There was no word on the tortuous Kazakh approval process, nor on the start of pilot production.


Overall this is a slightly disappointing RNS with delays apparent in all three assets.  Let us hope the CPR that was promised over the BNG block at the Oil Barrel conference will be released soon.

Wednesday 5 May 2010

Dae Han Issues Update about Galaz and NW Konys

Dae Han New Pharm has made its own announcement about the closing of the deal with LG International (LGI) to acquire a stake in Roxi Petroleum's (AIM:RXP) Galaz block.

A link to the original announcement in Korean can be found here.

Using Google Translate to get an English version of the release yields this result:


"Daehannyupam equity investment genetic Block 40%, LG Completes Acquisition of business

Daehannyupam invested in Kazakhstan oil optical operation of the project sign jeu Roxy Gala Careers live apart under development for 40% stake in Block jeu LG had completed an agreement to sell the firm announced on May 29.

With the completion of this agreement, apart jeu development of the project management will be given access to the LG International Corp. 5 is scheduled to begin production sometime in the pilot. Production of 1,600 barrels a day as the initial starting size of 3,800 barrels per day, said it plans to increase the production.

Current Kazakh government for the Northwest Connie seu Block C1 730 million barrels of production based on the pilot kept asking for is approved. To get approval from the government to smooth the current reserves will be calculated on the conservative, NK22 successful drilling of the reserves are projected to grow more.


This is the LG daehannyupam equity investment firm's large-scale genetic photosphere obtained for the commercial and reliability has been rated as a good opportunity."


Whilst understanding the nuances of the release is difficult, it does seem to suggest that current reserves C1 on NW Konys are "conservative" and that NK22 is projected to increase reserves.

Let's hope the results of NK22 are released soon.

LGI Announces Purchase of Galaz from Roxi

In a seemingly back to back announcement to Roxi Petroleum's (AIM:RXP) earlier disclosure about the sale of an interest in Galaz, LG International (LGI) has issued a press release about its purchase of a stake in Galaz.

The seemingly new disclosure is that LGI is going to become operator of the NW Konys field.  It seems the start of pilot production has slipped again to H2 2010, but the anticipated gross production rate has increased to 1,600bopd, with the expectation being set that gross production will rise to some 3,800bopd.

Sunday 2 May 2010

Roxi Petroleum Announces Sale of Galaz

On 29 April Roxi Petroleum (AIM:RXP) announced the sale of a stake in its Galaz project to LG International Corp (LGI).  This deal has been in gestation for some time, but the Sale and Purchase Agreement has finally been executed.

The deal is quite complex, and requires a great deal of concentration to understand completely.  Here are a few highlights insofar as I can tell.  It is recommended that any reader also consults the actual RNS issued by the company to check that I've not made any significant errors in this report of it.

  • Overall, Roxi's interest in Galaz will fall from 50.15% to 34.22%
  • In return, Galaz re-pays a loan from Roxi to Galaz of some $8.4m
  • Galaz also loans Roxi of some $8.7m to be re-paid out of future production
  • Roxi uses these proceeds to re-pay its convertible loan from Altius Energy (previously known as Arawak Energy), thus avoiding the dilutive effect of conversion.  Some of the proceeds are also used to purchase a 13% stake in Galaz from the local partners.
  • LGI provide a loan of up to $26m to Galaz some of which will be used to repay the the bridging loan from Kuat Oraziman of $3m announced on 31 March and some to re-pay $5.5m to KazRosMunai.  The rest of the money will be used to finance the working capital needs of Galaz and fund further development of the project.

Overall it seems that Galaz is now well-funded, with a credible international partner and Roxi has funds to finance work on other assets as well as participate in the upside on Galaz.  Maybe some of these funds will be used on Ravninnoe or to purchase a further stake there.

Unfortunately, we did not learn any more about the results of the NK22 well, which seems like a new discovery on the block.  Hopefully, we will hear news on that soon, together with the start of production on NW Konys.