You are viewing the North American News Edition
Choose the news you want to read
View the site in World Edition, North American News Edition
UK News Edition or Australian News Edition
Listen to Forum Webcasts with synchronised PowerPoint slides.
Company Information for Max Petroleum
Company stock charts - 6 Month chart
 AIM; MXP
View full financial data |
Company Statement
Max Petroleum is an independent oil & gas exploration and production company operating in the Pre-Caspian Basin in Western Kazakhstan, an area that has produced some of the world’s largest oil & gas discoveries. As at 31 March 2009, the Group owned a 100 per cent interest in the Blocks A&E and Astrakhanskiy oil and gas licence areas covering 13,500 km².
Max Petroleum’s strategy is to apply new, exploratory 3D seismic technology to the proven, highly prolific Pre-Caspian Basin to develop a high quality portfolio of drillable pre-salt and post-salt exploration prospects. Hydrocarbon production in the Basin began in 1911. Productive reservoirs are found in the shallow, “post-salt” section and deeper, “pre-salt” strata. More than 100 shallow post-salt fields were discovered during the Soviet era, with a mean field size of 34 million barrels of recoverable oil. Max Petroleum’s first discovery, the Zhana Makat Field, on its Blocks A&E licences, produces from the post-salt section.
The Basin’s deeper pre-salt discoveries include some of the largest oil and gas fields found in the last 35 years. These super-giant discoveries include the Tengiz, Kashagan, Karachaganak and Astrakhan fields, which range in size from 7 to 20 billion barrels of oil equivalent recoverable reserves. Max Petroleum’s Block E is located less than 60km north of the Tengiz Field and the Astrakhanskiy Block sits immediately adjacent to the Imashevskoye Field, which is the extension of the Russian Astrakhan Field into Kazakhstan.
Max Petroleum’s large licences contain numerous prospects for both the deeper, pre-salt and shallow, post-salt play types. The Group is applying cutting edge technology as well as extensive analysis of historical exploration activity on a regional scale to help understand and unlock the potential of its exploration acreage. The regional analysis has allowed Max Petroleum to put the existing fields and prospects on its blocks into context, allowing better insight and understanding into exactly what critical elements drive the formation of oil fields in the Pre-Caspian Basin. In addition, careful study of previous wells drilled using older methods of exploration, such as surface seeps, surface geology, gravimetric analysis and 2D seismic, has helped the Group understand where best to explore using its new 3D seismic data. In the pre-salt play on Blocks A&E, only one well has been drilled to date, without the advantage of 3D seismic, leaving this world-class potential resource play virtually untested.
Max Petroleum’s Head Office is in London, UK with other offices in Almaty, Kazakhstan and Houston, Texas. The Group has an experienced team with a proven track record operating all phases of exploration, development, production and marketing in Kazakhstan.
Operations and Technology
Operations
The principal activity of the Group is the exploration, development and production of oil and gas assets within the Republic of Kazakhstan. As at 31 March 2009, the Group owned a 100 per cent interest in the Blocks A&E and Astrakhanskiy oil and gas licence areas in the Pre-Caspian Basin in Western Kazakhstan.
Current Developments
Max Petroleum began the fiscal year ended 31 March 2009 with a focus on completing its 3D seismic acquisition programme while pursuing a farmout of one or two of its licences. In a period of rising commodity prices through September 2008, the Group had stabilised production from the Zhana Makat Field and was generating record revenues from the sale of crude oil. The Group completed the acquisition of a 20 per cent minority interest in the Blocks A&E licence in July 2008, increasing its ownership interest in Blocks A&E to 100, and obtained a two-year extension of the exploration period on the licence until March 2011.
The Group then initiated discussions with Macquarie Bank Limited (‘Macquarie’) to increase the borrowing base of its mezzanine credit facility (the ‘Credit Facility’), which eventually led to a comprehensive restructuring of both the Credit Facility and the Group’s unsecured convertible bonds (the ‘Bonds’). The Group also sharply reduced cash expenditures by scaling back its 2009 capital spending programme and reducing operating and administrative costs by approximately 30 per cent.
The Group’s Zhana Makat Field continues to perform well, with average daily production of approximately 2,000 barrels of oil per day (“bopd”) up towards he end of 2009. The field has been on test production since 2006 and then commercial production under a three-year trial production project since August 2007.
Exploration Programme
During 2009, the Group completed its 3D seismic acquisition programme, having acquired in excess of 5,240 km2 of 3D seismic data in Blocks A&E and Astrakhanskiy over a two-year period.
The Group’s capital restructuring was specifically designed to allow the Group to finish the processing and interpretation of the Blocks A&E seismic data, with a primary goal of maturing 10 to 15 drillable shallow and intermediate post-salt prospects by late 2009 and early 2010 from a portfolio of 36 existing 2D leads in the areas covered by the new 3D data. The Group completed detailed internal prospect reviews covering the Kuzbak and Bek Beke 3D surveys have generated 10 drillable prospects towards the end of 2009.The Group expects to complete a third and final prospect review of the 3D survey over Block A either before the end of 2009 or early in 2010.
Blocks A&E – Post-Salt (Shallow)
To date, the Group has matured 12 drillable post-salt prospects, ranging in estimated size from 9 to 50 million barrels of oil (“MMBO”) with an estimated range of geological chance of success between 25 per cent and 60 per cent. These prospects consist of four-way and faulted three-way anticlines that are well imaged on the Group’s new 3D seismic data. These types of traps are the most common found in the existing producing fields in the Pre-Caspian Basin. Furthermore, the Group is continuing to develop several intermediate Triassic leads, which the Group believes may develop into additional drillable prospects in the future.
The Group plans to retain a 100 per cent interest in this post-salt portfolio, as the Company believes that a drilling programme of 12 exploration prospects will offer a high probability of at least one commercial discovery, with an expectation of three to four commercial discoveries eventually resulting in a minimum of 100 Mmboe of 2P reserves, at a relatively low drilling cost of approximately US$1.7 million per well.
On 31 October 2009, drilling commenced on the ZMA-AN2 development well in the Zhana Makat Field on the Blocks A&E Licence area. After completion of the ZMA-AN2 well, the rig will drill a second development well in the Zhana Makat Field before moving on to drill the Borkyldakty exploration well and the remainder of the Group’s post-salt exploration portfolio.
Blocks A&E – Pre-Salt (Deep)
The Group’s pre-salt portfolio continues to expand and now includes 15 mapped leads and prospects consisting of two distinct play types. Of particular interest are 11 recently mapped features, which appear to be Devonian and Carboniferous-aged carbonate buildups occurring along the Guriyev Arch, an ancient geologic structure which underlies the central portion of Block E and the southern part of Block A. The portfolio also includes four shallower prospects and leads of Permian age, which are encased in salt. Individually, these prospects have estimated mean recoverable resource potential ranging from 200 to 600 MMBO. This newly updated portfolio, together with the supporting geological data, is currently being presented to potential partners for farmout. The Group believes the pre-salt prospect and lead portfolio will be of greater interest to major and large independent oil and gas companies given the recent availability of depth processed 3D data.
Astrakhanskiy Block
The Group’s geotechnical evaluation of the Astrakhanskiy Block is complete. The block contains what appears to be an extension of the super-giant Astrakhan and Imashevskoye fields located immediately to the Northwest on the same carbonate platform. In May 2009, the Group received approval from the MEMR to extend the exploration period of the Astrakhanskiy licence by two years until 12 January 2012. The amendment also established the Group’s three-year work programme for the licence, including a commitment to begin drilling the first exploration well on the Astrakhanskiy Block on or before 31 December 2009. The Group is currently seeking to farmout or sell its interest in the Astrakhanskiy licence in order to focus its efforts on the exploration and development of Blocks A&E.
Geographical Spread
Board of Directors and Key Management
| Michael B. Young | President and CFO |
| James A. Jeffs | Executive Co-Chairman |
| Robert B. Holland III | Executive Co-Chairman |
| Lee O. Kraus | Non-executive Director |
| David R. Belding | Non-executive Director |
| Maksut S. Narikbayev | Non-executive Director |
Company Address2nd Floor, 81 Piccadilly
|
Additional Address/Key ContactHouston Office |
Nominated BrokersJPMorgan Cazenove Ltd | Nominated AdvisorsWH Ireland |
Related News
11/02/10 - Max Petroleum Gets Astrakhanskiy Back On Track With First Well Due This Year15/01/10 - Max Petroleum Enters A New Phase With A 12-Well Campaign Now Underway In Kazakhstan
15/12/09 - No Shortage Of Newsflow Expected As Max Petroleum Readies For Its One-A-Month Exploration Campaign In Kazakhstan
18/11/09 - Max Petroleum Moves Ahead With New Development Wells On Its Zhana Makat Field In Kazakhstan
Most Recent Statement
08/03/10 - Drilling Update05/03/10 - Payment of Convertible Bond Interest
15/02/10 - Drilling Update
09/02/10 - 2010 ASTRAKHANSKIY LICENCE WORK PROGRAMME APPROVED
20/01/10 - CHANGES TO ADVISORY COMMITTEE
14/01/10 - Drilling Update