AIP sees gas reserves for License 1551 in Kazakhstan rise 35 %

American International Petroleum Corporation announced a 35 % increase in its recoverable, technically proved net gas reserves to 604 bn cf up from the previously reported 449 bn cf, for its License 1551, the Shagyrly-Shomyshty gas field, in Kazakhstan.
Ryder Scott Company, a Houston-based petroleum consulting firm, reviewed the Company's horizontal drilling and reservoir development studies demonstrating technically proved net remaining undeveloped reserves of 604 bn cf and issued an opinion letter stating that they are in general agreement with the estimates and that the reserves were prepared in accordance with standard industry procedures.

The Company's studies included horizontal well recovery analyses for drainage of reservoir areas in the 640-1280 acre range, revised operational plans for horizontal drilling, and detailed analyses of prior gas well completions in the License 1551 area. A pilot development drilling program is tentatively scheduled for this summer to verify the horizontal drilling application.
The initial 449 bn cf of technically proved reserves can be moved to the SEC proved undeveloped category upon completion of a gas sales agreement currently under negotiation with Gazprom and, upon the successful implementation of the horizontal pilot program, the additional 155 bn cf can be added to the PUD category.
Ryder Scott had previously reported, in an independent evaluation, 449 bn cf of technically proved recoverable gas reserves and 514 bn cf of probable recoverable gas reserves, net of royalty, based on traditional methods for vertical drilling and completing wells, each developing 160 acres of reservoir. At that time, the Company announced aggregate recoverable, technically proved and probable gas reserves of 963 bn cf for its License 1551. The report calculated an aggregate 1.39 tcf of gas in place, with 650 bn cf of proved gas in a productive "fairway" and 740 bn cf of probable gas in the north and south structural flanks.

President and CEO Joe MichaelMcKinney said, "We are pleased with the continued confirmation of the size and quality of the reserves in the Shagyrly-Shomyshty field through Ryder Scott's work and our own internal technical studies. This is supportive to our movement toward finalising field design, continuing negotiations for securing partners and a gas sales agreement and obtaining project financing. Upon execution of the gas sales contract, we expect to book a portion of the proved undeveloped reserves, gradually adding reserves through successful completion of wells. We believe that we will ultimately reach recoverable reserves well above 600 bn cf "
The Shagyryl-Shomyshty field was discovered in 1966 and delineated with more than 50 exploration wells, all of which were logged and many flow tested. Over 20 stratigraphic/structural control wells were also drilled to obtain specific geological structure information.

American International Petroleum is a diversified petroleum company which, through various wholly owned subsidiaries, is involved in oil and gas exploration and development in the Republic of Kazakhstan, and in refining, marketing and transportation of refined products in the United States.