NEWS - Production update, 6500 bopdI LIKE IT!!! (well most of it anyways)...
Arawak provides operational update
ANGUILLA, British West Indies, Sep. 14, 2005 (Canada NewsWire via COMTEX) --
TSX VENTURE TRADING SYMBOL: ABG
Arawak Energy Corporation (the "Company" or "Arawak") is pleased to announce that average production during August was in excess of 6,500 barrels of oil per day ("bopd"), with over 3,500 bopd being produced by the Company's 100% owned subsidiary Altius Energy Corporation in Kazakhstan. Despite the decision made to suspend production from the Besbolek field in Kazakhstan on September 1st pending the resolution of issues related to the transfer of the contract from the exploration to the production phase, production in Kazakhstan is currently close to 3,000 bopd and is continuing to grow with the successful drilling of new development wells in the Akzhar field. The Company is currently working to resolve the Besbolek issues. The current productive capacity of the Besbolek field is around 900 bopd.
In Russia, the Company's 50% affiliate ZAO PechoraNefteGas ("PNG") produced on average approximately 6,000 bopd (3,000 bopd net to Arawak) in August, currently approximately 6,300 bopd and production is continuing to rise. PNG is still working on the completion of its first horizontal well and drilling two further horizontal development wells, based on new mapping incorporating the results of new 3D seismic which has given considerably improved structural definition of the field. Preliminary indications suggest there may be some increase in the overall size of the structure, as well as opportunities to optimise recovery.
The Company is also pleased to announce that PNG has signed and expects to complete shortly a US $51 million reserve-based borrowing facility with BNP Paribas. The proceeds of this loan will be flowed up to Arawak and its partner in PNG, with the majority of Arawak's share being used to repay in full the loan originally put in place to acquire PNG, and the balance (after costs) used to enhance further the Company's cash resources available for future investment opportunities. As part of this financing, Arawak will guarantee 50% of PNG's obligations in line with its shareholding in PNG.
In Azerbaijan, the Company's non-operated associate Gobustan Operating Company Ltd., in which the Company holds a net 29.7% interest, is continuing to drill gas appraisal wells in the Duvanny field in the Coastal block in the anticipation of commencing gas sales in the fourth quarter. Once the current well has been drilled, the rig will return to the Kyanizadag field to side track the existing well and to drill the exploration section, which is expected to be completed in the fourth quarter.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
Arawak's common shares are listed for trading on the TSX Venture Exchange under the symbol "ABG". The Company is engaged in the exploration, development and production of oil and natural gas in Kazakhstan, Russia and Azerbaijan. The Company's asset in the Azerbaijan Republic is its interest in the Exploration, Development and Production Sharing Agreement ("EDPSA") for the South West Gobustan fields. Commonwealth Gobustan Limited ("CGL") holds an 80% interest in the EDPSA with the remaining 20% held by SOCAR Oil Affiliate. Arawak holds a 37.17% interest in CGL with the remaining 62.83% being held by two affiliates of China National Petroleum Corporation. Arawak's assets in Russia are held through ZAO PechoraNefteGas ("PNG") in which Arawak has a 50% interest with the remaining interest being held by Valkyries Petroleum Corporation. In Kazakhstan, Arawak's assets are held through its 100% wholly-owned subsidiary Altius Energy Corporation.
This press release includes "forward looking statements" based upon current expectations, estimates and projections of recoverable reserves, future production, future net income and anticipated sources of financing, that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company. These risks and uncertainties include, but are not limited to, risks associated with the oil and gas industry (including operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international activity. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in the Company's securities should not place undue reliance on these forward-looking statements.
SOURCE: Arawak Energy Corporation