1st. Qt. UpdateArawak announces operational update and filing of 2004 disclosure documents
Friday April 29, 6:03 am ET
TSX VENTURE TRADING SYMBOL: ABG
ANGUILLA, British West Indies, April 29 /CNW/ - Arawak Energy Corporation ("Arawak" or the "Company") is pleased to report steady progress during the first quarter of 2005, following the successful acquisition of its Kazakh and Russian assets. Arawak has entered the second quarter with drilling campaigns either active or imminent in all three countries of operation.
In Azerbaijan, a first appraisal well is being drilled in the Kyanizadag field in the Coastal block, with target depth of 3,800 metres and with natural gas and condensate as objectives. Results from this well should be available by the end of June 2005. The installation of gas processing facilities to service the existing gas wells in the Duvanny field is in progress, and first gas is now expected in October 2005.
In Russia, oil production in the first quarter averaged 5,580 barrels of oil per day (2,790 barrels net to Arawak) and two new development wells were successfully brought on line. A further two development wells are currently being drilled and the final portion of 90 square kilometres of 3D seismic over the Sotcheymu and Talyu fields is being interpreted to provide a full 3D suite over the fields by the end of July 2005.
In Kazakhstan, production in the first quarter averaged 2,000 barrels of oil per day. Seasonal weather factors in Akzhar and interruptions in the evacuation route for the Besbolek and Karataikyz fields have impaired production rates in the first quarter. However, a program of infrastructure upgrades is being initiated which is expected to improve production reliability. At the same time, a drilling rig is on its way to Akzhar to drill the first in a program of up to 15 appraisal and exploration wells, with a spud date for the first new well within May 2005.
Arawak also announces it has filed its 2004 annual disclosure documents, including its Statement of Reserves Data and Other Oil & Gas Information for the year ended December 31st, 2004 pursuant to National Instrument 51-101 Standards of Disclosure for Oil & Gas Activities of the Canadian Securities Administrators. Arawak's 2004 Annual Report, including audited consolidated financial statements and related Management's Discussion and Analysis, has also been filed. Copies of these documents may be accessed electronically from SEDAR at www.sedar.com and Arawak's web-site at www.arawakenergy.com.
The Company's total proved and probable reserve position at 72.5 million barrels oil equivalent remains virtually unchanged from the total derived from the independent engineers' reports for Azerbaijan, Russia and Kazakhstan published in 2004. However, the oil component in the total has risen from 75.4% to 78.0% while the total proved to probable ratio has fallen from 53.5% to 49.6%. Underlying these figures are increases in proved and probable oil of 1.6 and 1.2 million barrels in Kazakhstan and Russia respectively, and a decrease in proved and probable oil and natural gas of 3.2 million barrels of oil equivalent in Azerbaijan. It is important to note that the main cause of the reduction in Azerbaijan reserves is higher assumed oil prices - under the terms of the Exploration, Development and Production Sharing Agreement ("EDPSA"), the profit share is determined by value. Consequently, less oil and gas is required to provide the same value, and while this improves cash flow and net asset value under the EDPSA, it also results in lower oil and gas reserves attributable to Arawak.