Oil & Gas Corporate News

Max Petroleum (LON:MXP) (BUY, £0.50) (MXP, 16.5p, %u25B2 (11.86%)) has completed drilling the KZI-1 exploration well on the Kyzylzhar I prospect in Block E, targeting Jurassic and Triassic formations at depths of 500-1,200m. The well reached a total depth of 1,192m without encountering hydrocarbons and will be plugged and abandoned. The Sun ZJ-30 drilling rig will next move to the Zhana Makat Field to drill the ZMA-A15 development well, followed by the KAW-1 and UTS-1 exploration wells on the Karsak West prospect in Block E and the Uytas prospect on Block A, respectively.
The Company has also completed production tests on the lower three of five Triassic reservoirs in the BOR-1 discovery well, all of which have produced crude oil at commercial rates of 75-200 b/d. The Company is currently recompleting the BOR-1 well to test a fourth reservoir in the Field, prior to the regulatory 90-day limit on production tests for exploration wells in Kazakhstan. The Company plans to accelerate the acquisition of a 28 km2 high-fold, 3D seismic survey over the Borkyldakty Field prior to drilling additional appraisal and development wells. The 3D seismic survey will enhance the Company's ability to map the existing Triassic reservoirs in the Field, as well as evaluate an adjacent structure to determine if it is a drillable prospect. The Company expects to complete the 3D survey in the fourth quarter of 2010.

Comment: This is the fourth exploration well to be drilled as part of the current 12-well programme and is the third dry exploration well in a row after the initial Borkyldakty discovery. Bor-2 an appraisal well on the discovery also failed to encounter hydrocarbons. The three dry prospects represented about 22MMbbl of risked resources out of the 96MMbbl we had used in our initial valuation and, although the 38% of success can still be achieved over the course of the 12-well programme, another dry well is likely to test the patience of the market. As far as we are concerned we keep our initial estimates unchanged for now. We welcome the shooting of a 3D seismic survey over Borkyldakty, which should enable more efficient appraisal of the discovery.

Global Energy Development (LON:GED) (GED, 115p, %u25BA (0.0%)) announced the result of the testing of the Rio Verde 2 exploratory obligation well within the previously untested Rio Verde fault…

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