Caspian Region: Assaubayev family acquisition sees Max Petroleum shares soar

Max Petroleum’s shares have soared in value since the 4 August announcement that the influential Assaubayev family is taking a majority stake in the company. It is hoped that the placing will raise £37 million and enable the continued development of the Sagiz West field.

AGR Holdings, an Assaubayev held company, is investing £37 million of new funds via a share subscription, which will give it a 51% majority ownership of Max Petroleum. The new shares are priced at 1.64p each, a 37% premium to Friday’s closing price, and it has been reported that Aidar Assaubayev and Kanat Assaubayev will join the Max Petroleum board.

For an in-depth analysis of this issue, its ramifications for the region, and a feature on the Assaubayev family, please refer to this month’s upcoming issue of Caspian Focus.

Max Petroleum finds oil pay in Kazakhstan

Max Petroleum has said that that electric logs and oil shows observed during drilling indicate potential oil pay zones in the UTS-1 exploration well on the Uytas prospect in Block A in Kazakhstan.

The electric logs and oil shows suggests potential pay zones in the well, including 8m of estimated net oil pay in the Jurassic formation between 331m and 339m in depth, and 6m of estimated net oil pay in the Triassic section between 785m and 800m in depth. The company said that the well has reached the total depth of 827m.

The electric logs and pressure data also indicate an estimated 16m of net oil pay in the shallower Cretaceous section as part of a potentially significant 86m oil column ranging from 60m to 146m.

The company expects to commence the testing of the well in approximately one month using a workover rig upon receipt of the required government approvals. Following the running of the production casing in the well, the ZJ-30 drilling rig will move on to drill the Sekir West prospect in Block A.

“We look forward to testing all three zones in order to verify commerciality of what we believe could be a significant post-salt discovery,” said executive co-chairman James A. Jeffs.

For more news and expert analysis about the Caspian region, please see Caspian Focus.

© 2010 Menas Associates

Kazakh tax ruling reversed says Max Petroleum

Max Petroleum has said that the Supreme Court of Kazakhstan has reversed the rulings of the lower courts that had upheld a tax claim brought against the company and remanded the case to the Specialized Economic Court of Almaty for reconsideration.

As a result of the Supreme Court decision, payments towards the tax claim are suspended while the case is pending, including any further appeals, if necessary, through the Court of Cassation, the last court of appeal below the Supreme Court. Max Petroleum has has paid $3.1 million towards the tax claim and will apply to the local tax authorities to offset this amount against the company's other tax liabilities due in the fourth quarter of 2010.

The company continues to believe the tax claim is without merit and will continue to dispute it through the appropriate channels until final resolution, up to the Supreme Court, if necessary. This process is expected to take six months or longer. The Company has not yet received the written ruling from the Supreme Court and will update the market on additional details as appropriate.

To find out more about Max Petroleum please visit Max Petroleum's web site, which you can fine here.

For more news and expert analysis about the Caspian region, please see Caspian Focus.

Max Petroleum announces positive results for ZMA-A15 development well in Zhana Makat field, Kazakhstan

Max Petroleum has said that the ZMA-A15 development well in the Zhana Makat field, Kazakhstan, has reached total depth of 1,525 mt, with about 30 mt of net oil pay, including two Jurassic sandstone reservoirs with 12 mt of net oil pay at depths ranging between 780 and 829 mt, as well as two Triassic sandstone reservoirs with 18 mt of net oil pay with vertical depths ranging between 1,277 and 1,331 mt.

The well's key objective was the J-IIb Jurassic reservoir, with secondary exploratory objective in the Triassic. The J-IIb reservoir is well developed, while the Triassic reservoirs are productive in the adjacent Makat Field, wells have only produced from the Jurassic and Neocomian intervals in Zhana Makat. A successful production test in the Triassic would potentially represent a new discovery and extension of the Zhana Makat field.

Max Petroleum is running production casing in the well; the Sun ZJ-30 drilling rig will move on to drill the KAW-1 exploration well on the Karsak West prospect in Block E thereafter.

“Finding new Triassic potential in the Zhana Makat Field reflects the application of learnings from the Company's ongoing post-salt exploration programme in Blocks A&E. Our technical team moved the original location of the ZMA-A15 well to evaluate the Field's Triassic potential in response to our earlier Triassic discovery in the Borkyldakty Field, as well as our revised estimate of the Triassic potential in our upcoming Karsak West prospect that we expect to begin drilling by the end of August,” said, the company's CFO, Michael B. Young.

To find out more about Max Petroleum please visit Max Petroleum's web site, which you can fine here.

For more news and expert analysis about the Caspian region, please see Caspian Focus.

© 2010 Menas Associates

MOG terminates Max Petroleum’s Astrakhanskiy license

Max Petroleum has receive a dispatch from Kazakhstan’s Ministry of Oil and Gas (MOG) informing the company of the government’s decision to terminate Max Petroleum’s subsoil use license for the Astrakhanskiy Block in Western Kazakhstan. The agreement was said to be terminated due to Max Petroleum’s failure to comply with certain work obligations, stipulated under the license.

It is thought that MOG’s decision reflects a greater change in the treatment of subsoil use licenses. The decision does not affect the company's key asset, the Blocks A&E license area. The news of the termination comes shortly after the company’s decision to put on hold drilling of an exploration well, without a partner.

Max Petroleum has received assurances from its senior lender, Macquarie Bank Limited, and the holders of greater than 85per cent of its convertible bond holders that a termination of the Astrakhanskiy License would not constitute an event of default under the company's outstanding debt agreements. The company has expressed that it considers MOG's action as a preemptive one and is trying to arrange negotiations with MOG to discuss alternatives.

To find out more about Max Petroleum please visit Max Petroleum’s web site, which you can find here.

For more news and expert analysis about the Caspian region, please see Caspian Focus.

© 2010 Menas Associates