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Roxi Petroleum shares drop amid deep drilling delay in Kazakhstan

Last updated: 10:13 02 Jan 2014 GMT, First published: 11:13 02 Jan 2014 GMT

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Roxi Petroleum (LON:RXP) shares began 2014 with whip-saw trading, as the news of delays in Kazakhstan saw sentiment reverse after investor’s early enthusiasm.

It revealed that deep drilling had recently halted due to permitting delays, and drilling had only just resumed.

The company now expects the well to be completed later in the current quarter - versus prior guidance of a result in “early 2014”.

Anticipation of more positive news had seen Roxi shares moving higher in early deals, at one point reaching 6.5p per share, but after the announcement they were down 1p, or 18.6%, changing hands at 4.38p each.

The well was initially spudded in July and it is the first of five wells planned before the licence expires in June 2015. The AIM quoted firm has a 58.41% interest in the deep drilling project, which it sees as its greatest opportunity for “transformational discoveries.”

Roxi also reported results of lower risk, lower impact drilling on the shallower prospects in Kazakhstan.

It said that Well 807 has now been drilled and it is expected to produce at a rate of 225 barrels a day, which is 131 bopd to Roxi.

Along with four other pending wells, Roxi expects to add 1,200 bopd gross, 701 bopd net, from the shallow drilling programme.

"Roxi remains well placed to continue to build on the successes of 2013,” said chairman Clive Carver.

“Most importantly we have the funding in place to continue our multi-well development programme.

“We believe with the early indications from Well 807 that the shallow wells at BNG have already demonstrated themselves to be commercial and we are poised to discover in Q1 the value of the BNG's deeper prospects."

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