Quarterly Report For The Financial Period Ended 31 December 2017
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Unaudited Condensed Consolidated Statement Of Comprehensive Income
For The Financial Period 1 October 2017 To 31 December 2017
Unaudited Condensed Statement Of Financial Position As At 31 December 2017
Unaudited Condensed Statement Of Cash Flows For The Financial Period Ended 31 December 2017
Ramping Up Production
Since gaining effective control over the operations of Emir-Oil on 25 May 2017 at the end of the 6-month Transition Period, Reach Energy has reset production and exploration programs to achieve its near-term targeted oil production rate of 5,000 barrels of oil perday (“BOPD”). This targeted rate is expected to be achieved primarily by there sumption of production via Electrical Submersible Pumps (ESPs) and rejuvenation of existing producing wells and shut-in wells via matrix acidizing or acid fracturing. In addition,the start-up of production of horizontal well K-123 that was drilled in 2015 is expected to contribute significantly in ramping up oil production. Horizontal wells are expected to have greater productivity based on the performance of current producing horizontal wells in Emir-Oil. An upward trend of oil production is expected throughout the second half of 2017 as the number of wells resuming production is expected to increase from 14 to 27 by the end of 2017.
Once this near-term production rate is achieved, it is expected to be maintained before the commencement of ‘Phase1’ Production Ramp-Up in 2019 with the completion of oil and gas tie-ins and the commissioning of the Central Processing Facility (“CPF”). This Phase 1 upgrade is expected to increase the field processing capacity from 6,500 BOPD to1 2,000 BOPD for oil and 5.5 million standard cubic feet per day (“MMscf/d”) to 21.2 MMScf/d for gas.
Increasing Reserves and Resources
In January 2017, the Ministry of Energy of Kazakhstan has approved the extension of the Emir-Oil Exploration Contract by 3 years to January 2020. Emir-Oil is committed to drill 6 new exploration wells during this period to increase oil and gas reserves and resources of the concession block.
North Kariman and Yessen
Work is progressing on putting North Kariman and Yessen fields into Production Contracts. The Reserves Committee of the Republic of Kazakhstan has recently approved the submitted reserves estimate of North Kariman field.
For the financial period ended 31 December 2017, the year-to-date average crude oil export sales percentage is 87% and domestic sales percentage is 13%.