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Jupiter Energy optimistic about 2011 outlook

Jupiter Energy optimistic about 2011 outlook

Australian oil group Jupiter Energy (ASX:JPR) , which plans to list in London this year, reported on operational progress at its block 31 in Kazakhstan for the second quarter and offered a positive outlook for the rest of the year.

The operational progress during the quarter included the extension of Jupiter’s Block 31 acreage to 123 square kilometres (sq km) with the company committing to conduct a 3D seismic survey over the 59 km extension area.

Jupiter has already hired a contractor to undertake the programme, which is expected to kick off within the next few weeks.

The work programme also calls for Jupiter to drill two wells in 2012. The first of these wells will be spudded at the end of the current year.

In terms of funding, Jupiter had cash reserves of A$14 million at 30 June after raising a net total of A$11.1 million during the quarter. The company has also realised A$1 million from production sales during the quarter, bringing the total for the year to A$1.54 million.

Meanwhile, Jupiter is about to spud the J-51 exploration well at the block. The well will test the prospectivity of the Triassic and Jurassic targets within the Akkar East structure.

A previous well drilled at the block, J-52, found hydrocarbons in both the Triassic and Jurassic intervals, but test results indicated that the Jurassic reservoir could not produce at commercial rates.

Jupiter said in today’s report that its license for trial production from the Triassic reservoir in J-52 remains on track for submission to Kazakhstan’s central development committee.

The company’s J-50 trial production license is also being review by experts before its final submission to the authorities.

“The board continues to be optimistic about the company’s outlook and looks forward to reporting on progress towards the key milestones over the next six months,” said chairman and chief executive of Jupiter Energy Geoff Gander.

Block 31 is located in the Mangistau basin, South West Kazakhstan, and trends with three existing producing oil fields that have a potential resource in excess of 56 million barrels of oil.

The entire 100 percent Jupiter owned permit covers an area of proven oil production and the company has high hopes of success, especially considering Block 31 proximity to the large, 1 billion barrel, Zhetybai oilfield, owned and operated by MangistauMunaiGas.

Broker Westhouse struck an optimistic note on Jupiter Energy earlier this month, saying that the high level of near-term activity gave the company several catalysts for increasing shareholder value, and reinforced its positive view of the firm. Westhouse added that in its view, the company was undervalued.

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