Roxi Petroleum Issues Operational Update

Roxi Petroleum Issues Operational Update

Roxi, the Central Asian oil and gas company with a focus on Kazakhstan, is pleased to further update the market with news of progress at its BNG asset and also to set out its corporate strategy for the medium term.

BNG Background

The BNG Contract Area is located in the west of Kazakhstan 40 kilometers southeast of Tengiz on the edge of the Mangistau Oblast, covering an area of 1,561 square kilometers of which 1,376 square kilometers has 3D seismic coverage acquired in 2009 and 2010.

Roxi has a 58.41 per cent interest in the BNG Contract Area.

Deep Well A5 Well Status

The well was drilled to a total depth of 4,442 meters. Casing was set to a depth of 4,077 meters and the core sampling revealed the existence of a gross oil-bearing interval of at least 105 meters from 4,332 meters to at least 4,437 meters.

The well will be tested on an open-hole basis. This is principally because there is a stuck pipe in the interval between 4,322 and 4,401 meters. The stuck pipe is not expected to affect the outcome of the test and we will seek to remove it following the completion of the test.

Current position

Earlier this month we announced that commencement of the 30-day well test at Deep Well A5 was dependent upon the removal from the sub-surface of fluids used in the drilling of the well, so that the oil may flow to the surface; an operation known as “cleaning-up” the well.

The extremely high-pressure in the well (7,000 psi at surface) required the use of drilling fluids with a high density (2.16 g/cm3). Removing this high density drilling fluid has been problematic.

Some of the excess drilling fluids were ejected due to these high well pressures, but it became clear that intervention would be required to complete the operation.

As previously announced it was decided the best way to “clean-up” the well for testing would be using coil tubing equipment. This was sourced and transported to the well site and has speeded the clearing of the excess fluids.

However, as also previously announced, the generator powering the coil tubing equipment failed necessitating a delay while a replacement generator was sourced.

The majority of the drilling fluid is now thought to have been recovered to surface. We estimate there are a further 25 cubic meters of remaining excess drilling fluid to be cleared from the well before testing can commence.

Due to the high pressure in the well, the coil tubing equipment has become stuck at a depth of 2,996 meters. The coil tubing has been cut at a depth of 30 meters at wellhead and we are working with new contractors to remove it.

Despite the stuck equipment and excess drilling fluid, oil has recently flowed to the surface naturally. There remains the possibility that the natural high pressure in the well will continue to expel the excess drilling fluid, making the recovery of the coil tubing easier.

Should we not be able to remove the stuck pipe we would, as a last resort, seek to sidetrack the well from a depth of 4,320 meters running a 4.5 inch liner to the bottom of the well and then continue to test on a conventional basis. We expect this would to take up to a further 3 months to complete.
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