TSXV:ABG.H - Post by User
Post by
rolphieon Feb 23, 2006 3:07pm
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Post# 10410527
nice commentary from Aton
nice commentary from Aton20 February 2006, Monday
Begins gas production at Southwest Gobustan
Arawak Energy subsidiary GOC has started natural gas production at the Southwest Gobustan onshore oil and gas deposit in Azerbaijan, according to Asker Aslanov, a senior official at Azerbaijan's state oil and gas company SOGAR, Prime Tass reported.
Although gas production at Southwest Gobustan is limited at present to 30,000m3 per day, it is expected to rise shortly to
300,000m3 per day, or 0.1bcm per annum, Aslanov said. He added that in time annual gas output from the deposit was likely to range from 0.7bcm-1bcm.
GOC is the operating company developing Southwest Gobustan and is 80%-owned by Commonwealth Gobustan Ltd, which in turn is 62.8% held by China's CNPC and 37.2% by Arawak, with SOCAR controlling the remaining 20% of GOC. According to Aslanov, the deposit has estimated gas reserves of 25bcm and oil reserves of 105mn bbls, which is double a McDaniel's estimate as of Dec. 31, 2004 that the company reported in its accounts.
We also note that in 2005 GOC obtained a commercial gas sales contract, allowing the company to market its gas domestically at a very reasonable price of $42/mcm. This means that the project is going to generate very healthy revenue and profit once production reaches sustainable commercial levels.
The news is positive for the shares of Arawak Energy, which we continue to rate as one of the most attractive names in our Caspian universe.