Arawak announces 2007 record production results and further drilling success in Kazakhstan


    ANGUILLA, British West Indies, Feb. 11 /CNW/ - Arawak Energy Corporation
("Arawak" or the "Company") is pleased to report record production results for
2007 and that the exploration and appraisal drilling campaign in 2007 in
Kazakhstan produced very sound results, with a success rate of 72%.
    In 2007, production in Kazakhstan totalled 2,152,925 barrels, up 39% from
the prior year, while in Russia production (net to Arawak) totalled 1,563,089
barrels, a 17% increase over 2006.
    At Besbolek, 18 wells were drilled with 13 completed successfully.
Highlights of the drilling campaign include the discovery of the South
Besbolek field, first encountered by well 50 (initially reported in July
2007), which was followed up by three further successful appraisal wells.
    At Akzhar, 19 wells were drilled with 14 completed successfully. Here, a
continuous 2-rig drilling program in the second half of the year has resulted
in confirmation of several previously untested linear fault blocks in the
Akzhar South wing. Drilling to date has has proven oil in the Aptian,
Barremanian and Jurassic sands with productive capacities in the 200 bopd
    As a result of the 2007 discoveries, the Company is confident that it has
added significantly to its Kazakhstan reserve base and expects that this will
be reflected in the year end reserves updates.
    At Besbolek, exploration and appraisal drilling in early 2008 has been
paused while a 9.7 sq km 3D and 43 line km 2D additional seismic shoot is
interpreted and new drilling locations are finalised prior to the preparation
of the technical plan of development, which needs to be approved as part of
the process of transition from the exploration to the development phase,
expected in the latter part of 2008.
    The Company meanwhile has been active in Akzhar with two rigs drilling
since the beginning of 2008, and is expected to drill up to eight additional
appraisal and exploration wells in the first quarter of the year. Results have
been encouraging with discovery of a new multi-reservoir tilted fault block at
South Akzhar which extends the pool to the west.
    At Alimbai, the Company continues to drill its second exploration well,
where oil production was first established at the end of 2007 through re-entry
and workover of two old Soviet wells that were drilled in the 1940s and also
through the first shallow exploration well 751, with promising results. The
deeper exploration well 700 currently underway has had several promising shows
on mud logs in the lower Jurassic intervals. However, of special interest is a
thick zone with 25 meters of net pay logged in the shallow Barremanian horizon
and which can be correlated in old offset wells. Four additional locations
have been identified for drilling in the first quarter, prior to the planned
2D/3D seismic shoot, to assist in design of the seismic acquisition
    As at year end 2006, Arawak had no proved or probable reserves attributed
to the Alimbai block.
    The Company is planning a 2D seismic program at the large East Zharkamys
III exploration block for 2008, but at this time has received a letter from
the Ministry of Energy and Mineral Resources purportedly invalidating the
Company's contract because of non-fulfilment of minimum work commitments. The
Company believes the Ministry's position is incorrect as it was based on a
part year performance instead of the full year review as required. When
reviewed over the full year, in accordance with industry standards the Company
is in compliance with its commitments. The Company is now seeking to have its
rights restored through the courts and understands that approximately 50
contract holders, both domestic and foreign, have received similar letters.
    Total Kazakhstan production in February 2008 has averaged more than 8,000
bopd, reflecting new additions to production which have more than compensated
for the shut-in of some productive zones in accordance with the regulations
governing production from new wells in the exploration phase.
    In Russia, there are currently three rigs active in the Sotchemyu - Talyu
and North Irael fields. The Company recently completed well 200, a significant
step out in the main fore reef at East Sotchemyu. On initial pump test, the
well 200 produced at over 250 bopd with 2% water cut.
    At North Irael, the Company has spudded an exploration well 64 which
should be completed by the end of March. Also at North Irael, an 81 sq km 3D
seismic program is underway with 70% of the shoot completed. Upon completion
of this program, the seismic crews will be moved to the 100% owned South
Sotchemyu block, to acquire 40 sq km of 3D and 143 line km of 2D seismic over
this licence area, which was acquired in November 2007.

    The TSX does not accept responsibility for the adequacy or accuracy of
    this release.

    Arawak's common shares are listed for trading on the TSX 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
three producing fields and two exploration blocks in Kazakhstan are held
through its 100% wholly-owned subsidiary Altius Energy Corporation ("Altius").
Altius' main producing field is Akzhar, extended in 2006 from 3.8 to 71.5 sq
km, with smaller fields at Besbolek and Karataikyz. The two exploration
blocks, Alimbai and East Zharkamys III, are also situated in western
Kazakhstan. Arawak's 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 the Azerbaijan Republic,
the Company's asset is its interest in the South West Gobustan Exploration
Development and Production Sharing Agreement (the "EDPSA"). Commonwealth
Gobustan Limited ("CGL"), in which Arawak has a 37.17% interest, holds an 80%
interest in the EDPSA with the remaining 20% owned by SOCAR Oil Affiliate.
    This press release includes "forward looking statements", 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. Additionally, the estimates of reserves and future
net revenue for individual properties may not reflect the same confidence
level as estimates of reserves and future net revenue for all properties, due
to the effects of aggregation. 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 as filed at

For further information:

For further information: Alastair D. McBain, President & Chief Executive
Officer, Phone: +(44) 20 7973 4285, Fax: +(44) 20 7824 8466, E-mail:; Charles R. A. Carter, Chief Financial Officer,
Phone:+(44) 20 7973 4285, Fax: +(44) 20 7824 8466,

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Arawak Energy Limited

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