Reserves Update and Directorate Change
July 28 2005 - 3:03AM
UK Regulatory
28 July 2005
NELSON RESOURCES LIMITED ANNOUNCES
15% INCREASE IN RESERVES AND APPOINTMENT OF DIRECTOR
Nelson Resources Limited (TSX / AIM: NLG), a leading independent exploration
and production company operating in Kazakhstan, today announces an increase of
15% in proved and probable (2P) oil reserves net to Nelson's equity interest in
its fields, according to a mid-year update of the December 31, 2004 reserves
figures carried out by independent reserves evaluators McDaniel & Associates
Consultants Ltd., Calgary ("McDaniel").
The increase to 270 million barrels (MMbbls) of 2P reserves net to Nelson, from
235 MMbbls as of the previous review, is mostly attributable to a re-evaluation
of the Kozhasai field in north-western Kazakhstan, following the completion of
a test well carried out as part of the field's pilot production programme. The
reserves review was limited to the field's West Block where the test well is
located. As a result, the field's total 2P reserves at December 31, 2004 have
been re-evaluated at 75 MMbbls (38 MMbbls net to Nelson's 50% interest), a
seven-fold increase over the previous evaluation of 11 MMbbls.
McDaniel has also conducted an initial review of the Arman field, the mature
producing field in western Kazakhstan in which Nelson acquired a 50% stake in
February 2005. This is based on decline rate analysis of existing producing
wells, and has attributed 4.7 MMbbls of remaining recoverable proved producing
reserves to the field at December 31, 2004 (2.4 MMbbls net to Nelson).
================================================================================
(in '000 bbls) McDaniel & Associates Independent Reserves Update,
July 2005
All reserves figures as of Dec 31, 2004, before
royalty deductions
--------------------------------------------------------------------------------
Proved Total Probable Proved +
Producing Proved Probable
Kozhasai field reserves (100%)
Year end 2004 report 1,300 2,885 7,755 10,640
Increase 675 5,610 59,224 64,834
------- ------- ------- -------
Mid-year 2005 update 1,975 8,495 66,979 75,474
Total reserves net to Nelson
Year end 2004 report 46,418 163,400 71,458 234,858
Kozhasai (50%) increase 337 2,805 29,612 32,417
Arman (50%) addition 2,365 2,365 - 2,365
------- ------- ------- -------
Mid-year 2005 update 49,120 168,570 101,070 269,640
================================================================================
Nick Zana, Nelson's Chairman and Chief Executive Officer, commented, "I am very
pleased that the success of our drilling program is allowing McDaniel to
attribute more reserves to Kozhasai. I have always believed that this field
would prove to be a major asset for Nelson. We have a second new well being
completed now and expect to have the third of the six pilot development wells
completed by the end of the year."
Nelson also announces the appointment of Paul Maxwell to the Board of Directors
of the Company. Mr. Maxwell's appointment was ratified at Nelson's Annual
General Meeting on 10 June 2005, and became effective on that date. Mr. Maxwell
does not own or control any shares in the Company.
Since October 2004, Mr. Maxwell has been a Director and General Manager of
Meridian Securities (UK) Limited, a service provider to a number of investment
companies, based in London, UK. Prior to this, he served as Global Head of
Structured Trade Finance at KBC Bank NV (London, UK). Previously, he has also
held the position of Global Head of Commodity Finance, ABN AMRO Bank
(Amsterdam, Netherlands). On the appointment, Mr. Zana commented, "I would like
to welcome Paul Maxwell to the Board. Paul has great experience of financial
markets globally, and complements the Board's operational expertise."
There are no other matters to be disclosed in relation to Schedule 2, paragraph
(f) of the AIM Rules.
For further information, please contact:
----------------------------------------
Fred Hodder, Senior Vice President Tel: 020 7495 8908
Nelson Resources Limited fhodder@nelsonresources.co.uk
Investor Relations
Ann-marie Wilkinson / Nick Lambert Tel: 020 7861 3232
Bell Pottinger Corporate & Financial (London)
Notes
-----
Nelson Resources Limited is an oil exploration and production company with
operations in the Republic of Kazakhstan. The Company established its presence
in the Kazakhstan oil sector in 2000 and its management team, comprising both
international and Kazakh executives, has extensive experience of the Kazakh
operating and regulatory environment. The Company owns 50% of Kazakhoil Aktobe
LLP (KOA), a 50/50 joint venture between Nelson and Kazmunaigas, the national
oil company of Kazakhstan, which is developing the Alibekmola and Kozhasai
fields. The Company owns a 50% participatory interest in the North Buzachi oil
field located in western Kazakhstan (50% Nelson, 50% CNPC International
(Buzachi) Inc.). In May 2004, Nelson purchased 60% of Chaparral Resources Inc.,
which has a 60% interest in the joint stock company Karakudukmunai, operator of
and owner of a 60% interest in the Karakuduk field. In January of 2005, Nelson
acquired the 40% interest in this field previously owned by Kazmunaigas,
bringing the Company's aggregate ownership interest in the field to 76%. In
February 2005, the Company also acquired a 50% interest in the Arman field,
with the other 50% held by Shell. The Company also holds an option to acquire a
minimum 25% participatory interest in two Caspian Sea offshore blocks, Zhambai
South and South Zaburunye. The Company maintains its operational office in
Almaty, Kazakhstan, which oversees the field joint ventures in western
Kazakhstan. Nelson and its affiliated companies employ approximately 1,100
people. Common shares of Nelson are listed on the Toronto Stock Exchange and
London's Alternative Investment Market under the symbol NLG.
Further information on Nelson Resources can be found on the Company's website at
www.nelsonresources.com.
Readers are cautioned that the preceding statements and information may include
certain estimates, assumptions and other forward-looking information. The
actual future performance, developments and/or results of the Company may
differ materially from any or all of the forward-looking statements, which
include current expectations, estimates and projections, in all or part
attributable to general economic conditions and other risks, uncertainties and
circumstances partly or totally outside the control of the Company, including
oil prices, imprecision of reserve estimates, drilling risks, future production
of gas and oil, rates of inflation, changes in future costs and expenses
related to the activities involving the exploration, development, production
and transportation of oil, hedging, financing availability and other risks
related to financial activities, and environmental and geopolitical risks.
Discussion of the various factors that may affect future results is contained
in the Company's recent filings with Canadian securities regulatory
authorities. The Company disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events, or otherwise. 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. Additional information on the Company's reserves may be
obtained from the Company's most recent annual information form, available at
www.sedar.com.
END
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