Kazakh Max Petroleum launches cost cutting initiative

Oil&Gas Materials 1 February 2014 13:18

Baku, Azerbaijan, Feb. 21

By Elena Kosolapova - Trend: Max Petroleum Plc, an oil and gas company focused on Kazakhstan, has begun implementation of a significant cost cutting initiative that it expects to continue for the remainder of financial year 2014 and beyond, the company reported on Jan. 31.

"The initiative recognizes the company's shift from exploration and development to primarily production with a focus on maximising cash flow," the comapy said.

The company expects to announce in early February a modest Sagiz West reserve increase as of 31 December 2013, resulting from wells that have been drilled since its most recent reserve report. The cmpany believes there are a few other opportunities to increase reserves, but no longer plans an ongoing level of drilling activity that its current cost structure is intended to support.

Moreover, the company intends to maintain the organisational capacity to resume drilling its NUR-1 deep well while efforts to obtain financing continue. Negotiations with prospective partners are, however, no longer currently in progress.

"We expect significant improvement in our cash flow as expected production increases from existing discoveries and cost reductions are realised, although some material transitional implementation costs may be expected". Robert Holland and James Jeffs, Co-Chairmen of the company said.

Max Petroleum Plc is an oil and gas exploration and production company focused on Kazakhstan. The company holds 100 percent of the Blocks A and E at the license area covering over 12,455 squire kilometers in the highly prolific Pre-Caspian Basin in West Kazakhstan