Max Petroleum begins Kazakhstan testing
Max Petroleum, the oil and gas exploration company focused on Kazakhstan, said it had begun testing on a well in the Asanketken Field.
Max Petroleum, the oil and gas exploration company focused on Kazakhstan, said it had begun testing on a well in the Asanketken Field.
The firm's shares rose 4% after it said it testing in a Jurassic reservoir at the ASK-J2 well from depths between 1,307 and 1,312 metres.
It reported flow at a stable rate of 503 barrels of oil per day with no water and said the zone would be produced on test production for 90 days.
It is good news for investors who have seen their shares tumble by 55% over the last week after Max said it was struggling to complete drilling at its NUR-1 well after "anomalously high pressure" left a drill pipe stuck at 5,772 metres.
However, that is far from Max Petroleum's only problem, as its exploration licence runs out in March 2013 and the technical difficulties clearly put that timeframe in danger.
This has led to some brokers to urge investors to sell up.
Merchant analyst Brendan Long said the broker was cutting its price to reflect "the increased risk for the NUR-1 well, heightened financial risk, reduced availability of capital for development funding and lower crude oil prices.
"In the immediate term we suggest selling out of the stock. The financial leverage of the company will magnify its operational challenges," Long said.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
Albert Einstein's first violin sells for £860,000 at auction
Albert Einstein left his first violin behind as he escaped Nazi Germany. Last week, it became the most expensive instrument not owned by a concert violinist
-
Rob Granieri: the mysterious billionaire boss of Jane Street
Profits at Jane Street have exploded, throwing billionaire Rob Granieri into the limelight. But it’s not just the firm’s success that is prompting scrutiny