Roxi Petroleum PLC (LON:RXP) saw their shares decline after issuing a statement explaining that the oil & gas firm would be forced to sell at the prices imposed by the former Soviet republic until 2018. Roxi Petroleum’s operations are mainly focused in Kazakhstan.
Thus, their shares dropped to 9.62 pence, a decline of 0.5 pence or 4.9%, after the company stated that the current license for their western Kazakhstan BNG site forces them to sell the oil they produce there at approximately US$10 per barrel.
Roxi further stated that even at the low prices in question, the period to recover their investment from these shallow wells is less than a year, if they are successful. The company hopes that by 2018, they can turn the license they now have at BNG into a production license, which will allow the company to market their goods at global prices.
The BNG site saw an aggregate production of 62,000 barrels of oil per day from shallow wells for the period.
The firm stated that it was on schedule to complete their commitments for the work program and intend to start renewing their licenses at BNG and converting them into production licenses in 2018, in June.
Chairman of Roxi Petroleum, Clive Carver, explained that they have received independent confirmation of the excellent potential of BNG’s shallow fields via the reserve report compiled by Gaffney Cline & Associates and that the board feels these shallow fields have significant value themselves.
He also stated that they still have to independently determine the even more significant potential of the Ayrshagyl deep field and maybe of other shallow fields too. The company is still working their drilling plan to complete these goals as early as possible and if they are successful, it will be considered a definite advantage.
The company doesn’t have a lot of debt externally. It will also gain up to a 99% stake in one of the most interesting Kazakhstani prospects if their Baverstock merger goes through.