Q1 2008 Review & Update
London, 3 June 2008: Zhaikmunai L.P. (LSE: ZKM) (‘Zhaikmunai’), the oil and gas exploration, development and production company, today provides an update on its Kazakh operations for the first quarter of 2008.
Revenue
Revenues from oil sales were $ 34.9 million (Q1 2007: $16.2 million), up 115% compared to the January-March period in 2007.
Sales volumes for the first quarter of 2008 were 446.121 bbl, up 16% from 385.024 bbl in the first quarter of 2007.
Net price received
The weighted average Brent crude oil price on which Zhaikmunai based its sales for the first quarter of 2008 was US$93,22 bbl versus US$57.76 bbl for the first quarter of 2007.
The discount, accounting for trader’s costs and fee, was US$13.63 bbl for the first quarter of 2008 (versus US$12.53 bbl for the same period of 2007).
Accordingly, the average netback for crude oil sales during the first quarter of 2008 was US$79.59 bbl (versus US$45.23 bbl for the first quarter of 2007).
Capex
Total capital expenditure (on a cash basis) in the first quarter of 2008 amounted to US$34.3 million, compared to US$33.1 million for the first quarter of 2007.
Production
Production volumes for the first quarter of 2008 increased to 459.810 bbl, up from 415.646 bbl in the equivalent period in the previous year.
Daily production has risen to 6,200 barrels per day (up from an average of 5,067 barrels per day in 2008) while the average production rate per well was 777 barrels per day.
As at the end of March 2008 there were 7 producing wells. At the end of December 2007 there were also 7 producing wells. (Well 10 has been back in production since February and well 24 has been in work over since February).
Drilling
During Q1 2008 the company operated four drilling rigs. Exploration well 31 and exploration well 32 reached final depth in Q4 of 2007. Exploration well 27 and exploration well 33 reached final dept in Q1 of 2008.
During Q1 2008 the company operated three work over rigs. Work over operations have been going on for wells 10, 13, 22 and 24. Last February, following work over, well 10 has come back into production.
Exploration
The current Chinarevskoye exploration permit expired on 26 May 2008. Therefore, the first quarter exploration activities have been in preparation of the submission of the final reserve estimate. Any exploration works begun prior to the expiration date of the exploration license need to be completed by 26 August 2008. Approval of the reserves plan and the development plan are expected in September and November of this year respectively.
Gas Treatment Plant
The contract with KazStroyService was signed on 10 August 2007. During the first quarter 2008 various meetings with the vendors have been held on the project’s design. Most activities during the first quarter related to the engineering phase of the project. By the end of March the first design documents (piping and instrumentation diagrams) had been received and agreed. As a result, an additional sour gas-condensate stabilization unit will be added to the scope of the EPC contract. Commercial negotiations are ongoing to reflect the revised scope of work and new timing. Zhaikmunai has hired SGS to perform project monitoring services.
Engineering
The main other ongoing construction projects are: the oil pipeline (from the field to the city of Uralsk), construction of an oil loading terminal, the gas pipeline (from the field to the Intergas Central Asia Gas pipeline), infield pipelines and roads, expansion of the existing Oil Treatment Unit, construction of a reservoir pressure maintenance system and the construction of a 90 flat residential building in the city of Uralsk.
About Zhaikmunai
Zhaikmunai L.P. is an oil and gas exploration, development and production company, quoted on the London Stock Exchange (Ticker symbol: ZKM). Its principal producing asset is the Chinarevskoye Field located in North western Kazakhstan.
Zhaikmunai (Kazkhstan) L.L.P., a wholly owned subsidiary of Zhaikmunai L.P. It holds a 100% interest in and is the operator of the Production Sharing Agreement for the Chinarevskoye Field.
www.zhaikmunai.com
Further enquiries
Zhaikmunai LP info@zhaikmunai.com
Brunswick
Michael Harrison +44 (0)20 7404 5959
Carole Cable
Forward-Looking Statements:
Some of the statements in this document are forward-looking. Forward-looking statements include statements regarding the intent, belief and current expectations of the Partnership or its officers with respect to various matters. When used in this document, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should” and similar expressions, and the negatives thereof, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to risks and uncertainties that could cause actual outcomes to differ materially from those suggested by any such statements. 3
