Aurado to acquire Aral rights in Kazakhstan petroleum concession

Aurado Exploration announces that it has entered into an agreement to acquire a 90 % interest in privately-held Aral Petroleum, which holds an Exploration and Production License for 100 % of the Liman block in western Kazakhstan. The Liman block covers an area of 6,459 sq km (1,596,000 acres), and is located on the north shore of the Caspian Sea in the vicinity of the city of Atyrau.
According to information supplied by Aral, 49 prospective structures have been mapped based upon available seismic and data from the numerous wells drilled within the license area. Aral has estimated the recoverable reserves within 15 of the structures to be 706 mm barrels at a depth of 500 m down to 3,000 m, and above the salt level that is found within most of the Liman block. Seismic work has identified several structures below the salt, with each structure potentially holding recoverable reserves of up to 700 mm barrels. Aurado intends to commence development of the Liman block as soon as possible.

The Limanblock is located onshore in the Pre-Caspian Basin, in the vicinity of the Kashagan field, considered one of the largest oilfields found in more than 30 years. Located in shallow waters of the northeast Caspian Sea, Kashagan is believed to hold recoverable reserves of 10-30 bn barrels of oil; it is being developed by a consortium including ENI, Shell, ExxonMobil, and TotalFinaElf.
And the Liman block is within a similar geologic setting to both Kashagan and to ChevronTexaco's 6-9 bn barrel Tengiz oil field in Kazakhstan, which is considered one of the world's largest "super giants" and which is currently producing about 270,000 bpd. The $ 2.5 bn Caspian Pipeline Consortium (CPC) pipeline, a 1,700 km long crude oil pipeline originating at Tengiz and terminating at a marine terminal near the port of Novorossiisk, Russia, on the Black Sea, passes through the Liman block.

Under the terms of the agreement, Aurado will acquire the rights to Aral from Oil Capital Ltd. (OCL) and UK-based Net Capital Limited (NCL) in exchange for a $ 100,000 deposit, $ 1.9 mm at closing and a further $ 3 mm in December, 2002, plus a maximum of 200 mm shares which will come out of the 600 mm shares that Aurado is proposing to issue to OCL for the rights to a proposed petroleum concession acquisition in Turkmenistan, as per the company's press release of March 27, 2002.
In other words, Aurado will not be required to issue any additional shares to OCL for the rights to the Liman block. Furthermore, NCL will retain a 10 % interest in Aral, which will be carried through the exploration and development of the Liman block.

Aral's license has an initial 5-year exploration phase, with a total commitment of $ 12.9 mm. The term of the production phase is 25 years, after the end of the 5-year exploration phase. Aral's rights within the contract area go from surface to basement, except for 8 small producing areas within the Liman block which are excluded from the contract, and which are held by KazMunaiGaz (formerly KazakhOil), the national oil and gas company.
The closing of the acquisition is subject to the completion of formal due diligence and the execution of a formal Purchase Agreement between Aurado, OCL and NCL by June 30, 2002. The closing is also subject to shareholder and regulatory approval, including satisfaction of the requirements of the Toronto Stock Exchange, as well as the receipt of a third-party engineering report that values the reserves in the Liman block. Aurado intends to call a meeting of its shareholders to approve both the acquisition of Aral and the rights to Block III, Turkmenistan, as soon as possible.