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Roxi Petroleum secures final approval to begin pilot production at South Yelemes


Roxi Petroleum (LON:RXP) has received the final regulatory approval needed to start pilot production at its South Yelemes field in Kazakhstan.

The Ministry of Oil and Gas of Kazakhstan has now granted approval for gas flaring for the period 2012 to 2014 to Roxi’s operating company BNG.

Investors cheered the news, sending shares in Roxi up 6.5 percent to trade at 4.25 pence in early deals, valuing the company at £24.4 million.

Following the approval, Roxi expects wells 54 and 805 on South Yelemes to be put into pilot production in the second quarter of 2012. Following the start of pilot production, BNG will test and evaluate Well 806 as part of its ongoing development of the field.

“This is the final approval that BNG needs to commence pilot production on South Yelemes and to generate much needed cash flows for one of Roxi's core assets,” said chief executive of Roxi Petroleum David Wilkes.

Roxi last week spudded has spudded the NK-10 well to appraise the Arskum discovery in the NW Konys field in Kazakhstan, which follows the successful NK-9 well.

Drilling operations on the NK-10 well are expected to take around 30 days to complete.

Earlier in November, the company told investors that the NK-9 well, which also targeted Arskum, intersected oil bearing reservoir sands in the Upper Jurassic section, confirming the Roxi’s understanding of the oil in place on NW Konys.

NK-9 will be perforated and tested upon final interpretation of the wireline logs data from the well.

Quick facts: Caspian Sunrise

Price: 8.05 GBX

Market: AIM
Market Cap: £151.55 m

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