Post updated and moved
here.
Content up to 28/2/10 below, but will not be updated.
Source: Canamens
Overview
Roxi Petroleum's (RXP) BNG Contract Area, sometimes known as Ayrshagyl, is probably the most mouthwatering block in the Roxi Petroleum portfolio, lying as it does some 40km away from the super-giant 8bn barrel Tengiz field in Kazakhstan.
Prospects
At the time of acquisition, 25 leads had been identified at various depths from the Jurassic to the Carboniferous. It was stated at the 2009 AGM that it was believed a common source rock under-pinned the acreage that may have been up to 40,000 feet thick. The existing leads are being refined and delineated by the 3-D seismic programme that took place during 2008. Some areas of the block are excluded as they contain shallow fields in the 5-100 millions of barrels of oil (mmbo) range from the Jurassic, Triassic and Permian horizons.
The shallow fields in this area tend to be above the salt (or post-salt). But the super-giants like Tengiz have been discovered under the salt (or pre-salt). It is to be hoped that the new techniques associated with the modern 3-D seismic have provided imaging that is good enough to delineate prospects under the salt.
Interpretation of the 360km2 3-D seismic us due to be received in November 2009.
It was understood at the
2009 AGM that the company was in the process of deciding well locations, with an intention to start drilling ~3 Jurassic depth wells in the G-54 area and possibly 1 deeper well to the Permian in the G-1 (Yelemes) area, with first spud in 4Q09, with the deeper well more likely to be in 1Q10. These wells appear to be primarily appraising the existing discoveries that were made in the 1980's. The combination of modern 3-D seismic and old and new well logs ought to provide enough data to support the generation of 2P reserves to SPE standards. The original G-1 tested oil at ~2,000barrels of oil per day (bopd) - from
2009 AGM report). See
BNG seismic post for brief discussion of other targets; it may just be, that Roxi will consider testing the Triassic Truncation play with one of the planned G-54 wells.
G-54 tested oil at a rate of 250bopd in 1998. Once production has been established from G-54, the cashflow, together with the Canamens funding ought to provide the financial platform to explore the deeper horizons.
Clearly, the timing of the wells has been put back by the re-negotiation of the farm-out to Canamens, and the
broker note of December 2009 with Matrix indicating shallow wells in 1-2Q10; although it is not clear if these wells are targeting just the Jurassic or whether they will also be targeting the Triassic play. Matrix indicate the well targeting the deeper Y-1 structure won't be spudded until 1H11, which would be something of a disappointment if true.
The "coffin-shaped" area that is not currently under license is thought to be prospective, and indeed the image sourced from Canamens above suggests there may be an existing field there. At the
2009 AGM it was suggested this area may become available during 2010.
The announcement of 3 February 2010 stated that Roxi was preparing to reperforate the old G-54 well and that a rig has mobilised ready to drill 2 wells - presumably shallow wells - on the South Yelemes field. Moreover, they were planning to drill 6 further wells on the BNG block during 2010. It is to be hoped at least some of these additional wells will also test the deeper, larger structures and that at least one of the shallow wells tests the Triassic lead underneath G-54. Roxi has also tendered a contract to shoot more 3-D seismic over the southern part of the block, presumably covering the old Saztobe well.
Reserves
Reserves for the BNG Contract Area to SPE standards have yet to be published. However, the 2008 annual report shows reserves and resources to Soviet-era GOST standards of over 400mmbo (C1+C2+C3), with 42mmbo C1+ C2. After the recent farm-out deal with Canamens, the Roxi share of these resources would be around 93mmbo 3C or 10mmbo 2C.
The 2C reserves are attributed 40mmbo to Yelemes and 2mmbo to G-54.
The combination of modern 3-D seismic and old and new (from the anticipated drilling programme) well logs ought to provide enough data to support the generation of 2P reserves to SPE standards.
Of course, we don't yet know the prospective resources attributed to the leads and prospects identified on the recent 3-D seismic.
Financing
On 29 October, Roxi
announced the details of the new financing transaction. This deal means that Roxi's additional work commitments are reduced to $8m, in return for reducing its eventual stake in BNG to 23.41%. Whilst it is disappointing that the final stake is BNG is being reduced so dramatically, it is undoubtedly good news that funding issues have now been resolved and the path is clear to commence drilling; hopefully in the near future.
Roxi Petroleum's (RXP) Beibars 50% owned contract area is about 40km from Aktau and 14km NW of the Oimasha field in quite a prolific hydrocarbon bearing area in the Mangishlak basin in Kazakhstan. In the 2008 Visor Capital Presentation (slide 6) it was described as one of the longer term, high impact blocks in the portfolio.
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