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Roxi Petroleum extends BNG licence ahead of four well deep drilling campaign

Published: 07:59 17 Jul 2013 BST

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Kazakhstan focused explorer Roxi Petroleum (LON:RXP) has extended its licence over its flagship BNG asset for two more years, until June 2015.

Roxi says that in this time it plans to carry out significant exploration activity on the asset without the need for additional funding from shareholders.

Deep drilling is the focus for this year. The first deep well has been spudded and is being drilled to a depth of 4,700 metres. This programme is expected to last 90 days. The company says it will not be exposed to any cost overruns because the drill contractor is working on a turn-key basis.

As many as four deep wells will be drilled in 2013 and 2014, for an estimated total cost of US$35mln.

Roxi expects this will be covered by the US$40mln investment it received in January, and it also plans to sell certain assets from its portfolio.

Existing, shallow, operations at BNG currently produce around 200 barrels a day from two wells.

"The renewal of the BNG licence and the commencement of the deep drilling programme mark the coming together of several years’ preparatory work,” said chief executive Clive Carver.

“With our first deep well we are targeting a known producing area with a history of successful production and consequently we have high expectations of a significant discovery.

“Over the next two years, with up to four additional deep wells to drill in the Ayrshagal region of the BNG Contract Area, in addition to further shallow wells and extended prolonged testing of existing wells in the already producing Yelemes region, we expect to prove that BNG has a significant commercial value, measured both by reserves and production volumes.”

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