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April 9, 2005
US Oil Company to Acquire Kazakhstan Oil & Gas Rights
by HNN Staff
Santa Ana, Calif. (HNN) – Santa Ana, California, based Turan Petroleum, Inc. (OTC: TURP), an independent energy exploration and development company, today reported that it has entered into a definitive agreement to acquire Turan EnerPetroleum, a Kazakhstan limited liability company that owns a license to explore for hydrocarbons in the Republic of Kazakhstan.
Turan Petroleum, Inc. will acquire 100% of Turan EnerPetroleum, which holds a license from the government of Kazakhstan to explore for hydrocarbons in the ARIS region. Upon closing, which is scheduled for April 30, 2005, Turan EnerPetroleum will become a wholly owned subsidiary of the Company. The Company plans to prospect and produce in the ARIS region under a concession license granted by the Ministry of Power and Minerals of the Republic of Kazakhstan. Turan EnerPetroleum's concession license was granted for an extendable 25-year term (beginning in 2001). Following closing, the Company's ARIS territories concession license will cover approximately 22,000 square kilometers in the South Kazakhstan Kizilordinskoy regions.
Initial geological studies have been completed by third parties, and show the potential of locating substantial amounts of recoverable oil and gas products inside the Company's concession license territories. The studies have located over 50 geological formations that are typically oil or gas bearing. Northeast of the ARIS concession, gas has been discovered in an area known as Amangeldy. The ARIS concession contains similar geological formations as those found to produce hydrocarbons in the Amangeldy fields. Southeast of the concession site (approximately 120 km), oil is being extracted near the city of Tashkent.
Northwest of the ARIS site (approximately 250 – 300 km) large oil deposits have been discovered in fields known as Kymkol and Zhanzhol. The main hydrocarbon deposits in the ARIS site are expected to be associated with salt deposits. Scores of these deposits have been identified within the ARIS site. The same Pre-Caspian cavity that is producing gas in Karachaganak and oil in the Tenzig region are connected to the ARIS site. Salt structures at similar depths as those producing in Tenzig and Karachaganak are also believed to exist within the ARIS site, based on the information contained in the initial geological reports. The Tenzig field contains one of the largest proven oil deposits in the world.
The Company intends to undertake further geological testing, conduct exploratory drilling, and extract hydrocarbons from the ARIS site. Following extraction, the Company plans to efficiently deliver its oil and gas production to both local and world markets. The South Kazakhstan region, which includes the Turan EnerPetroleum's ARIS concession, contains population of about 2 million people. Currently, natural gas is delivered to the region from Uzbekistan, with the local supply being subject to shortages. The infrastructure to deliver natural gas locally is in place and a demand for locally produced gas exists. The regions where Turan EnerPetroleum's concession license is located already have infrastructure in place, including asphalt roads, railways stations, with refineries located a relatively short distance from the ARIS site.
As recently as the 1990's Kazakhstan was not well known. However, since then, the Republic of Kazakhstan has proven to be a significant player in the world oil market. During 2003 Kazakhstan's oil exports were valued at more than $7 billion. Since 1993 US companies have invested over $6 billion in Kazakhstan. The U.S Department of State estimates that Kazakhstan will be one of the top 10 oil producing nations in the world by 2015. Robert VanDuren, Turan's President states, "We are thrilled to complete these contract negotiations, and look forward to being a significant contributor to the overall hydrocarbon production levels in Kazakhstan."
Turan Petroleum, Inc., a Nevada corporation, is an oil and gas exploration and development company based in Nevada and California. The development stage Company is pursuing opportunities in new energy markets, focusing on the acquisition and development of oil and gas properties in Eurasia, and other resource rich regions of the former Soviet Union. The Company anticipates the need for additional capital during the next 12 months. The Company's common stock is traded Over the Counter under the symbol "TURP"
Background: Turgay Basin, Kazakhstan
According to Oil && Gas Journal, the Turgay sineclise in central Kazakhstan covers about 140,000 sq km, some 60,000 sq km of which is favorable for oil and gas.
The area`s first oil and gas field, Kumkol, was discovered in 1984. The other fields include Maybulak,Aryskum, Kyzylkiya,Nuraly,Aksay, Konus, Bektas, and Akshabulak. All of the discoveries are in the Aryskum downwarp.
Western interests in the area are growing. RWE-DEA AG and Erdol-Erdgas Gommern GmbH, a joint venture of Gaz de France and Bayernwerk AG, secured a $106.7 million loan in late 1997 to develop Akshabulak oil field. They foresee a $320 million stage development.
Production was to start in mid-1998 and continue 20 years from reserves estimated at 110 million bbl. Crude was to be shipped 800 km to the Kazak refinery in Chimkent. That oil would be swapped for a similar volume produced in western Kazakhstan and shipped through Russia, Belarus, and Poland for refining in Germany.
A Calgary company, Hurricane Hydrocarbons Ltd., acquired Kazakhstan`s Yuzhneftegaz in the closing days of 1996 for $120 million. That organization produced about 50,000 b/d of oil from Kumkol field and had 317 million bbl of proved and probable reserves. Hurricane has a further 23 million bbl of reserves in the country through its interest in the Turan petroleum project, a joint venture that holds rights to Kizyl-Kiya, Aryskum, and Maybulak fields and the South Kumkol exploration area.
V.I. Korchagin, V.I. Karpov, and I.V. Puzanova described Turgay`s oil and gas potential in an article in Geologiya Nefti i Gaza No. 5 in 1996, reprinted in Petroleum Geology.
They wrote that three oil and gas bearing complexes are recognized at Turgay: Middle Jurassic, Upper Jurassic, and Lower Neocomian.
The Middle Jurassic complex consists of interbedded sandstone, siltstone, and clays with thickness up to 90 m. Upper Jurassic is composed of sandstone, siltstone, and clays less than 100 m thick. The Lower Neocomian clastic complex is represented by alternating members of sandstone, siltstone, and clay. It is host to two productive horizons. Thickness of this complex does not exceed 30 m.
About three fourths of Turgay petroleum resources are in the Jurassic complexes, and about one fourth is in the lower Neocomian. Depth to pay is generally no more than 8,200-9,800 ft.
In the north of the Turgay downwarp oil shows have been recorded in Upper Devonian-Carboniferous carbonates. Noncommercial flows or films of oil were found in Carboniferous sediments during drilling of 13 wells in the Shcherbakov, Lesnoy, Ospanov, and Silant'yev areas. Novonezhin well 119 yielded 1.5 tons of oil from Visean limestone.
Early explorers quickly evaluated the anticlines, so the main thrust of exploration is now for stratigraphic and fault traps in the border zone of the graben-synclines and in structural saddles.
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