Galaz
Galaz and Company LLP (Galaz) operates the NW Konys Sub-soil User Contract on behalf of Roxi and its Partners.
The block covers 180km2 after receiving an extension to the area in January 2011, and is located in the southern end of the highly productive Turgai basin in Central Kazakhstan, two hours north of Kyzylorda. Galaz was acquired by Roxi in 2008 through the acquisition of 59% of Eragon Petroleum Limited, through which the company holds a controlling interest.
Good infrastructure exists in the form of roads, pipelines and processing facilities in nearby fields. In February 2009, Galaz successfully completed the drilling of four wells (NK3, NK4, NK5, NK6) to appraise the NW Konys field. All four wells encountered commercial volumes of oil in Upper Jurassic channel sands at a depth of approximately 1300m. Three wells were later put on production test at a maximum combined rate of 1,200 barrel of oil per day on natural flow.
The remaining well (NK4) will require installation of a pump before completing production tests in 2012. Following testing, new reserves were estimated and 14.6 million barrels of C1 and C2 reserves added to the State Balance of Kazakhstan, and in December 2010 the Pilot Production Project license was approved by the authorities, which, once the emissions licenses are ganted, production from NW Konys will build from initial rates of approximately 500 barrels of oil per day from the existing wells to 2,000 barrels of oil per day, as more wells are drilled. McDaniels issued a CPR report on NW Konys in June 2010 giving SPE Reserves of 7.5 million barrels P2 category, based on the wells drilled to date.
Exploration well NK22 was drilled between November 2009 and February 2010, to test Lower Cretaceous (Arskum), Upper and Middle Jurassic targets. The well encountered 12.8 metres of oil pay in the Arskum sands and shows in the Upper and Middle Jurassic. This discovery confirms the presence of hydrocarbons on the NK22 structure which will be targeted for further exploration in 2010/2011.
In December 2010 the company announced that it had concluded its agreement to sell a 40% interest in Galaz to LG International Corporation (“LGI”). After completion of the sale to LGI the company’s participating interest is 34.22%.
Galaz recently spudded well NK-9 on 27 October 2011 and NK10 on 28 November 2011 both were drilled to a total depth of 1,500 metres and will be tested during the first quarter of 2012.
Galaz put well NK-6 into production in January 2012, representing the first pilot production from NW Konys. The well has been producing at an average daily rate of approximately 21.7 tons of oil per day.
