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Roxi Petroleum PLC

("Roxi" or the "Company")

Update on operations at BNG

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 flagship BNG asset.

Shallow Wells

Well 143

Roxi is pleased to announce a new discovery at the MJ-F structure located towards the North of South Yelemes field at BNG.

Well 143, was spudded on 1 April 2013, and in June 2013 was drilled to a depth of 2,750 meters, 250 meters deeper than the original planned depth. The well targeted Jurassic Callovian sands at a depth of 2,170 meters with a secondary objective in the Cretaceous Valanginian limestone at a depth of 1,935 meters.

Roxi now believes there are three main intervals of interest, at 2,193, 2,216 and 2,692 meters. Additionally, a fourth interval of interest at 2,088 meters has been identified from core samples.

Despite experiencing a number of failed well tests we persevered with the well and following a work-over to remove excess drilling fluids from the well we are pleased to report oil has flowed from intervals at 2692 meters and 1935 metres depth.

Testing so far of the interval 2692 - 2694.5m (Middle Jurassic) has averaged about100 barrels per day.

Further testing of these two intervals to determine reliable flow rates continues before assessing the remaining intervals of interest. If successful, the location of this well may considerably extend the shallow horizon at South Yelemes from which wells 54, 805, and 806 are currently producing.

Deep Wells

Deep Well A5

The well was spudded in July 2013 and drilled to a total depth of 4,442 meters with casing set to a depth of 4,077 meters to allow open hole testing. 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.

As announced on 15 July 2015 we decided to side-track the well from a depth of 4,000 meters and then to set casing to the full length of the side- tracked well.

Roxi is pleased to report that the side-track drilling has reached 4,392 meters leaving approximately 50 meters to drill. Work has paused to remove a blockage believed to be caused by excess drilling fluid and will recommence when cleared. Once completed preparation work for a 90-day flow test will commence. The test itself is still expected to commence in Q4 2015.

Encouragingly the pressure in the well remains high.

Deep Well 801

Deep Well 801 was spudded on 15 December 2014 with a planned Total Depth of 4,950 meters. The well is located approximately 8 kilometers from Deep Well A5 and was planned to target the same structure as Deep Well A5 in the Middle and Lower Carboniferous. The well was drilled by Sinopec, the Chinese multinational, at a fixed cost of $11 million.

As previously reported core samples and logging have revealed a potentially oil bearing interval starting from 4,536 meters and extending 100 meters. The pressure and temperatures encountered indicate this well is unlikely to be connected to the reservoir targeted by Deep Well A5. Therefore should Deep Well 801 prove commercially viable it would be a separate discovery to the potential discovery previously announced in connection with Deep Well A5.

The well has been drilled to a total depth of 5,050 meters and five potential levels for production have been identified below the salt layer. Since the previous update the lowest two of these levels have been perforated from a depth of 4,920 meters.

The heavy-duty rig used to drill 801 has been dis-assembled pending its use on Deep Well 802. A lighter rig is on site and being assembled over Deep Well 801 and will be used to test the perforated intervals and subsequently the other intervals of interest.

Encouragingly, pressure in Deep Well 801 has been increasing steadily over the past few days although not to the high levels encountered at Deep Well A5. Once the pressure stabilizes and the new rig is operational testing will commence.

New deep wells

Deep Well 802

As referred to above the heavy-rig used on Deep Well 801 has been disassembled for use on a new Deep Well 802, located some 8 kilometers from Deep Well 801. Deep Well 802 is to be drilled to a depth of 5,000 meters targeting the Lower Carboniferous

Deep Well A6

Deep Well A6 is located 2 kilometers from Deep Well A5 and it is planned to be drilled to a Total Depth of 5,000 meters targeting principally the Middle Carboniferous

Preparatory work has already commenced at the drill site and following the completion of the side-track drilling at Deep Well A5 that rig will be reassembled ready to spud in Q4 2015.

Current production

Aggregate production from shallow wells 54, 805 & 806 is some 250 bopd (148 bopd net to Roxi). Additional production is expected from wells 807 and 143 in the coming weeks.

Under the terms of the BNG licence all production is sold a domestic price, which is currently $10 per barrel.

Devaluation of the Tenge

Recently the Tenge has been devalued against the US$. At the time of writing the Tenge / US$ exchange rate is some 28% lower than the previous prevailing rate.

Most of Roxi's income is denominated in US$ but a good part of its expenditure is denominated in Kazakh Tenge. According when reporting in the Company's functional currency, US $'s, reported costs going forward are expected to be lower.

Even though the Group's functional currency is the US $ and the devaluation of the Tenge is a commercial advantage for Roxi the Company is obliged under prevailing accounting conventions to reflect the fall in the value of the Tenge in the carrying value of its assets. Accordingly should the Tenge continue to trade 28% lower the value of BNG, the Group's principal asset will reduce by 28% in the full year results.

Drilling costs

The continuing fall in the price of oil has also resulted in cheaper drilling contracts. For A5 and 802 Roxi expects to sign turnkey contracts of no more than $8 million each, approximately 50% of quotes received at the time Deep Well A5 was spudded..

Comment:

Clive Carver, Chairman said

"For a long time we have held high hopes for Well 143 both as a stand alone well and as a part of a wider structure. We believe the oil produced from two intervals indicates our optimism was well founded."

"We also remain pleased with the pace of the work at out two deep wells A5 and 801 and look forward to reporting progress in due course."

Enquiries:

Roxi Petroleum PLC Clive Carver, Chairman
+7 727 375 0202

WH Ireland Ltd James Joyce / James Bavister
+44 (0) 207 220 1666

Qualified Person

Mr. Nurlybek Ospanov, Roxi's senior geologist who is a member of the Society of Petroleum Engineers ("SPE"), has reviewed and approved the technical disclosures in this announcement.

This information is provided by RNS
The company news service from the London Stock Exchange

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