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Roxi Petroleum secures two year extension to BNG contract

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Kazakhstan focused oil firm Roxi Petroleum (LON:RXP) has secured regulatory approval for the extension of its subsurface user contract over the BNG area, which now runs to June 2013.

The extension, which is the first of the two provided by the terms of the BNG contract, obliges Roxi to drill two exploration wells on the contract area to depths of 2,500 and 4,500 metres.

Traders cheered the news, sending shares in Roxi up 6.5 percent in early deals in London.

“We are pleased to receive the anticipated extension to the BNG contract from the Ministry, which allows us to prepare for what should be an exciting two years exploring and appraising,” said chief executive of Roxi Petroleum David Wilkes.

A recent independent audit has estimated the BNG area’s resource potential at 900 million barrels of oil with best estimate prospective resources of 500 million barrels.

A total of 30 prospects and a further seven leads have been identified by Roxi within the current area so far. These prospects range in size from 3 to more than 80 million barrels of oil.

Roxi is currently ranking the identified prospects to schedule a drilling programme it for 2012/13.

Work is also under way to prepare South Yelemes wells 54 and 805 for pilot production in the final quarter of the year. Production requires approval from the Kazakh authorities, which is currently sought by Roxi.

Shares in Roxi climbed 0.25 pence to trade at 4.125 pence this morning. The company currently has a market cap of £17.35 million.

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Price: 8.5 GBX

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Market Cap: £160.03 m
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