Arawak resumes oil production in Kazakhstan
January 22 2009 - 6:33AM
UK Regulatory
TIDMAAK
RNS Number : 0830M
Arawak Energy Limited
22 January 2009
Arawak ENERGY LIMITEd
Whiteley Chambers, Don Street, St. Helier, Jersey JE4 9WG
LSE & TSX TRADING SYMBOL: AAK
22 January 2009
FOR IMMEDIATE RELEASE
ARAWAK resumes oil production in kazakhstan
Arawak Energy Limited ("Arawak" or the "Company"), an oil and gas exploration
and production company, announces that it is resuming oil production at its four
operated fields in Kazakhstan. Arawak announced on 5 December 2008 that it had
curtailed production at the fields following a significant deterioration in
margins owing to high taxation and a material decline in world oil prices.
Procedures to restart production at the Akzhar, Besbolek, Karataikyz and Alimbai
fields, which are each 100% held and operated by Arawak, commenced on 18 January
following the adoption of a new tax code in Kazakhstan effective 1 January 2009,
under which it is anticipated that the customs export duty ("CED") will no
longer be applicable to crude export sales provided that payments are made in
compliance with the new tax regime.
In the coming weeks, production at the four fields is expected to return to
pre-curtailment levels of approximately 9,300 barrels of oil per day ("bopd").
Arawak undertook a programme of development drilling at the Akzhar and Besbolek
fields in the fourth quarter of 2008 with ten new wells drilled and completed at
Akzhar and six new wells at Besbolek. These additional wells will be phased into
production as existing operations ramp up.
The Company's non-operated Saigak field, which is governed by a production
sharing agreement and exempted from CED, has continued to produce normally
throughout the period at approximately 1,100 bopd net to Arawak, which holds a
40% participating interest in the field.
In Russia, the continuous decline in world oil prices in the latter weeks of
2008 resulted in a collapse in the domestic market and a sharp reduction in
Arawak's domestic sales. Exports from Russia continued in the ordinary course.
Reduced local sales resulted in high inventories at the end of 2008 and
consequently the Company curtailed production at the beginning of 2009 as
storage facilities became fully utilised. However, domestic sales are now
picking up enabling Arawak to reduce inventory and increase production towards
normal levels. Arawak's net production at the Sotchemyu-Talyu and North Irael
fields is now approximately 4,430 bopd.
Alastair McBain, Arawak's President and Chief Executive Officer, commented: "We
were pleased with the results of our fourth quarter drilling campaign in
Kazakhstan and now that the economic environment is once more viable for us to
produce and export crude oil, we look forward to being able to demonstrate our
full production capability at Akzhar and Besbolek."
For further information please contact:
Arawak Energy Limited Tel: +44 (0) 20 7973 4285
Tanya Pang, Head of Investor RelationsFax: +44 (0) 20 7824 8466
E-mail: info@arawakenergy.com Web: www.arawakenergy.com
Brunswick Group LLP Tel: +44 (0)20 7404 5959
Patrick Handley
JPMorgan Cazenove Limited Tel: +44 (0)20 7588 2828
Steve Baldwin
Neil Haycock
Oriel Securities Limited Tel: +44 (0)20 7710 7600
Richard Crawley
Natalie Fortescue
Notes to editors
Arawak's Common Shares are listed for trading on both the Toronto Stock Exchange
("TSX") and the London Stock Exchange ("LSE") under the symbol "AAK". On 16
January 2008, Arawak together with Rosco S.A. ("Rosco"), announced that the
Boards of both companies had reached agreement on the terms of a recommended and
increased pre-conditional cash offer to be made by Rosco (or a wholly owned
subsidiary of Rosco) to acquire the entire issued and to be issued share capital
of Arawak (the "Increased Recommended Offer"). The Increased Recommended Offer
is being made at a price of CAD 1.00 for each Arawak share. The Board of Arawak
considers the terms of the Increased Recommended Offer to be fair and
reasonable.
Arawak is engaged in the exploration, development and production of oil and
natural gas in Kazakhstan, Russia and Azerbaijan. In Kazakhstan, the Company
holds five producing fields and two exploration blocks. The Company has a 40%
participating interest in the Saigak producing block acquired in June 2008. The
remaining assets are held through its 100% wholly-owned subsidiary Altius Energy
Corporation ("Altius"). Altius' main producing field is Akzhar with smaller
fields at Besbolek, Karataikyz and Alimbai. The two exploration blocks East
Zharkamys III and Tamdykol are also situated in western Kazakhstan. Arawak's
producing assets in Russia are held through ZAO PechoraNefteGas ("PNG") and LLC
NK Recher-Komi ("Recher-Komi"), in which Arawak has a 50% interest with the
remaining interest being held by Lundin Petroleum AB. Also in Russia, Arawak
holds a 100% interest in the Kymbozhyuskaya exploration block and in the South
Sotchemyu appraisal block. In Azerbaijan, the Company's asset is its interest in
the Exploration Development and Production Sharing Agreement ("EDPSA") for the
South West Gobustan oil and gas fields. CGL, a company registered in Anguilla,
British West Indies, in which the Company has a 37.17% interest, holds an 80%
interest in the EDPSA with the remaining 20% held by an affiliate of SOCAR. The
remaining 62.83% share in CGL is held by two affiliates of the project operator,
CNPC.
This announcement includes "forward-looking statements", including statements
with respect to Arawak's anticipated exploration and development activities
which are based on the opinions and estimates of management at the date the
statements are made, and are subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ materially
from those projected in the forward-looking statements. These risks and
uncertainties include, but are not limited to, risks associated with the oil and
gas industry (including operational risks in development, exploration and
production; delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of reserve
estimates; the uncertainty of estimates and projections in relation to
production, costs and expenses and health, safety and environmental risks), the
risk of commodity price and foreign exchange rate fluctuations, the uncertainty
associated with commercial negotiations and negotiating with foreign governments
and risks associated with international activity. Although Arawak believes that
its expectations represented by these forward-looking statements are reasonable,
there can be no assurance that such expectations will prove to be correct. Due
to the risks, uncertainties and assumptions inherent in forward-looking
statements, prospective investors in the Company's securities should not place
undue reliance on these forward-looking statements. For a detailed description
of the risks and uncertainties facing Arawak, readers should refer to Arawak's
Annual Information Form for the year ended 31 December, 2007 and dated 31 March,
2008 as filed at www.sedar.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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