LSE & TSX TRADING SYMBOL: AAK
JERSEY, Channel Islands, Jan. 22 /CNW/ - Arawak Energy Limited ("Arawak"
or the "Company"), an oil and gas exploration and production company,
announces that it is resuming oil production at its four operated fields in
Kazakhstan. Arawak announced on 5 December 2008 that it had curtailed
production at the fields following a significant deterioration in margins
owing to high taxation and a material decline in world oil prices.
Procedures to restart production at the Akzhar, Besbolek, Karataikyz and
Alimbai fields, which are each 100% held and operated by Arawak, commenced on
18 January following the adoption of a new tax code in Kazakhstan effective 1
January 2009, under which it is anticipated that the customs export duty
("CED") will no longer be applicable to crude export sales provided that
payments are made in compliance with the new tax regime.
In the coming weeks, production at the four fields is expected to return
to pre-curtailment levels of approximately 9,300 barrels of oil per day
("bopd"). Arawak undertook a programme of development drilling at the Akzhar
and Besbolek fields in the fourth quarter of 2008 with ten new wells drilled
and completed at Akzhar and six new wells at Besbolek. These additional wells
will be phased into production as existing operations ramp up.
The Company's non-operated Saigak field, which is governed by a
production sharing agreement and exempted from CED, has continued to produce
normally throughout the period at approximately 1,100 bopd net to Arawak,
which holds a 40% participating interest in the field.
In Russia, the continuous decline in world oil prices in the latter weeks
of 2008 resulted in a collapse in the domestic market and a sharp reduction in
Arawak's domestic sales. Exports from Russia continued in the ordinary course.
Reduced local sales resulted in high inventories at the end of 2008 and
consequently the Company curtailed production at the beginning of 2009 as
storage facilities became fully utilised. However, domestic sales are now
picking up enabling Arawak to reduce inventory and increase production towards
normal levels. Arawak's net production at the Sotchemyu-Talyu and North Irael
fields is now approximately 4,430 bopd.
Alastair McBain, Arawak's President and Chief Executive Officer,
commented: "We were pleased with the results of our fourth quarter drilling
campaign in Kazakhstan and now that the economic environment is once more
viable for us to produce and export crude oil, we look forward to being able
to demonstrate our full production capability at Akzhar and Besbolek."
Notes to editors
Arawak's Common Shares are listed for trading on both the Toronto Stock
Exchange ("TSX") and the London Stock Exchange ("LSE") under the symbol "AAK".
On 16 January 2008, Arawak together with Rosco S.A. ("Rosco"), announced that
the Boards of both companies had reached agreement on the terms of a
recommended and increased pre-conditional cash offer to be made by Rosco (or a
wholly owned subsidiary of Rosco) to acquire the entire issued and to be
issued share capital of Arawak (the "Increased Recommended Offer"). The
Increased Recommended Offer is being made at a price of CAD 1.00 for each
Arawak share. The Board of Arawak considers the terms of the Increased
Recommended Offer to be fair and reasonable.
Arawak is engaged in the exploration, development and production of oil
and natural gas in Kazakhstan, Russia and Azerbaijan. In Kazakhstan, the
Company holds five producing fields and two exploration blocks. The Company
has a 40% participating interest in the Saigak producing block acquired in
June 2008. The remaining assets are held through its 100% wholly-owned
subsidiary Altius Energy Corporation ("Altius"). Altius' main producing field
is Akzhar with smaller fields at Besbolek, Karataikyz and Alimbai. The two
exploration blocks East Zharkamys III and Tamdykol are also situated in
western Kazakhstan. Arawak's producing assets in Russia are held through ZAO
PechoraNefteGas ("PNG") and LLC NK Recher-Komi ("Recher-Komi"), in which
Arawak has a 50% interest with the remaining interest being held by Lundin
Petroleum AB. Also in Russia, Arawak holds a 100% interest in the
Kymbozhyuskaya exploration block and in the South Sotchemyu appraisal block.
In Azerbaijan, the Company's asset is its interest in the Exploration
Development and Production Sharing Agreement ("EDPSA") for the South West
Gobustan oil and gas fields. CGL, a company registered in Anguilla, British
West Indies, in which the Company has a 37.17% interest, holds an 80% interest
in the EDPSA with the remaining 20% held by an affiliate of SOCAR. The
remaining 62.83% share in CGL is held by two affiliates of the project
This announcement includes "forward-looking statements", including
statements with respect to Arawak's anticipated exploration and development
activities which are based on the opinions and estimates of management at the
date the statements are made, and are subject to a variety of risks and
uncertainties and other factors that could cause actual events or results to
differ materially from those projected in the forward-looking statements.
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. Although Arawak believes that its expectations represented by these
forward-looking statements are reasonable, there can be no assurance that such
expectations will prove to be correct. 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. For a detailed description of the risks and
uncertainties facing Arawak, readers should refer to Arawak's Annual
Information Form for the year ended 31 December, 2007 and dated 31 March, 2008
as filed at www.sedar.com.
For further information:
For further information: Arawak Energy Limited, Tanya Pang, Head of
Investor Relations, E-mail: email@example.com, Tel: +44 (0) 20 7973 4285,
Fax: +44 (0) 20 7824 8466, Web: www.arawakenergy.com; Brunswick Group LLP,
Patrick Handley, Tel: +44 (0)20 7404 5959; JPMorgan Cazenove Limited, Steve
Baldwin, Neil Haycock, Tel: +44 (0)20 7588 2828; Oriel Securities Limited,
Richard Crawley, Natalie Fortescue, Tel: +44 (0)20 7710 7600