Jupiter Energy, the Australia-listed oil group, has secured official approval for an extension to its existing Block 31 acreage in Kazakhstan. New 3D seismic data will now be acquired for the additional area to identify potential drilling locations.
The approval from the Kazakh Ministry of Oil & Gas means Block 31's existing acreage of 63.39 km2 has been increased by 59.29 km2 , giving a total permit area of 22.68 km2.
Block 31 is located in the Mangistau Basin, South West Kazakhstan, and trends with three existing producing oil fields that have a potential resource in excess of 56 million barrels of oil.
The additional acreage will form part of the Block 31 contract that Jupiter already has with the Kazakh Ministry of Oil & Gas and, as a result, the same fiscal terms and conditions for the existing 10 year exploration and 25 year production periods will apply to it.
Jupiter is committed to completing the acquisition of 3D seismic over the new extension area before 31 December 2012. Its cost is estimated by the company at $US2.4 million.
The company intends to complete negotiations for the 3D seismic work as soon as possible and will look to commence acquiring the data in the third quarter of 2011.
Jupiter notes that a number of existing wells drilled within the new area during the 1960's and 1970's are thought to have encountered hydrocarbons. Detailed data on the drilling results is scarce, although Jupiter continues to seek information on these wells.
The entire 100% Jupiter owned permit covers an area of proven oil production and the company has high hopes of success, especially considering Block 31 proximity to the large, 1 billion barrel, Zhetybai oilfield, owned and operated by MangistauMunaiGas.
"We believe this new acreage will offer us additional opportunity. The south eastern boundary of the extended Block 31 will be close to the Zhetybai field which is one of the largest oilfields in the country," Jupiter chairman and chief executive Geoff Gander said.
Jupiter will keep shareholders updated on progress with the 3D seismic program over the course of the second half of 2011.