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Roxi Petroleum shares advance after blockage in A5 well is removed

Deep Well A5 will now be tested, 801 will be deepened and Roxi will soon receive cash from the Galaz sale

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Deep Well 801 is located just 8 kilometres from A5

Roxi Petroleum (LON:RXP) shares advanced after it told investors that the blockage in Deep Well A5 had been cleared.

A 30-day well testing programme is now set to start in Kazakhstan, the company added.

Roxi also revealed that Deep Well 801, which spudded in December and has encountered 100 metres of potentially oil bearing intervals, will now be drilled deeper and the target depth will be extended to 5,100 metres rather than 4,790 metres.

This will allow the well to target Lower Permian and Middle & Lower Carboniferous oil bearing reservoirs, the company said.

Drilling had reached the original 4,790 metre target depth.

Deep Well 801 is located just 8 kilometres from the A5 discovery, though a commercially viable success would be deemed a new and separate discovery.

Roxi also updated investors on the sale of its part-owned Galaz unit, which following recent improvements to the crude price will see the AIM company receive US$23mln rather than the US$20mln minimum expectation.

The buyer has now received all required regulatory clearances, and has paid the US$58mln of the fee, and the next completion which involves payment to Roxi is anticipated in the first two weeks of June.

Roxi says net proceeds from the sale will be sufficient to cover development and drilling costs at the BNG projects. The company expects to make a US$15mln profit on the disposal.

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Price: 8.75 GBX

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