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Roxi Petroleum hopeful of new farm-out for BNG oil block in Kazakhstan this year

Roxi Petroleum hopeful of new farm-out for BNG oil block in Kazakhstan this year

Kazakhstan-focused Roxi Petroleum PLC (LON:RXP) is hopeful it will have concluded a replacement farm-out arrangement for the BNG contract area later this year.

The comment was included in the group’s report for the six months to June 30 2011.

The group reached an acceptable agreement with previous farm-out partners for BNG, Canamens, following their decision to withdraw from Kazakhstan.  The cancellation raised Roxi's interest in this asset to 58.41 percent from 23.41 percent.

Roxi's principal objective is now to negotiate an acceptable replacement farm-out arrangement to allow the development work at its flagship asset to continue.

“It will not be until we have concluded a replacement farm-out arrangement on BNG that we can speak with confidence about the future. Based on our conversations to date we hope such an arrangement will be in place later this year,” Roxi said.

In January, Roxi completed a US$50 million farmout with LGI on the Galaz project.

The Galaz deal and the reimbursement from Canamens regarding BNG led to Roxi booking a pretax profit in the first half of US$45.08 million, compared with a loss of US$44.25 million.

Chief executive David Wilkes added: "We continue to be challenged with finding the right financing solutions for the exploration of some of the deeper prospects on BNG, however, we believe that should we be able to put this in place, together with the ongoing development of the NW Konys field, the transformation process for Roxi will be complete, moving us from a pure exploration company to an oil producer with additional upside in the form of further unexplored acreage on both our core assets."

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