AAK Arawak

 

TIDMAAK 
 
RNS Number : 0830M 
Arawak Energy Limited 
22 January 2009 
 

 
 
 
Arawak ENERGY LIMITEd 
Whiteley Chambers, Don Street, St. Helier, Jersey JE4 9WG 
 
 
LSE & TSX TRADING SYMBOL: AAK 
 
 
22 January 2009 
 
 
FOR IMMEDIATE RELEASE 
 
 
ARAWAK resumes oil production in kazakhstan 
 
 
Arawak Energy Limited ("Arawak" or the "Company"), an oil and gas exploration 
and production company, announces that it is resuming oil production at its four 
operated fields in Kazakhstan. Arawak announced on 5 December 2008 that it had 
curtailed production at the fields following a significant deterioration in 
margins owing to high taxation and a material decline in world oil prices. 
 
 
Procedures to restart production at the Akzhar, Besbolek, Karataikyz and Alimbai 
fields, which are each 100% held and operated by Arawak, commenced on 18 January 
following the adoption of a new tax code in Kazakhstan effective 1 January 2009, 
under which it is anticipated that the customs export duty ("CED") will no 
longer be applicable to crude export sales provided that payments are made in 
compliance with the new tax regime. 
 
 
In the coming weeks, production at the four fields is expected to return to 
pre-curtailment levels of approximately 9,300 barrels of oil per day ("bopd"). 
Arawak undertook a programme of development drilling at the Akzhar and Besbolek 
fields in the fourth quarter of 2008 with ten new wells drilled and completed at 
Akzhar and six new wells at Besbolek. These additional wells will be phased into 
production as existing operations ramp up. 
 
 
The Company's non-operated Saigak field, which is governed by a production 
sharing agreement and exempted from CED, has continued to produce normally 
throughout the period at approximately 1,100 bopd net to Arawak, which holds a 
40% participating interest in the field. 
 
 
In Russia, the continuous decline in world oil prices in the latter weeks of 
2008 resulted in a collapse in the domestic market and a sharp reduction in 
Arawak's domestic sales. Exports from Russia continued in the ordinary course. 
Reduced local sales resulted in high inventories at the end of 2008 and 
consequently the Company curtailed production at the beginning of 2009 as 
storage facilities became fully utilised. However, domestic sales are now 
picking up enabling Arawak to reduce inventory and increase production towards 
normal levels. Arawak's net production at the Sotchemyu-Talyu and North Irael 
fields is now approximately 4,430 bopd. 
 
 
Alastair McBain, Arawak's President and Chief Executive Officer, commented: "We 
were pleased with the results of our fourth quarter drilling campaign in 
Kazakhstan and now that the economic environment is once more viable for us to 
produce and export crude oil, we look forward to being able to demonstrate our 
full production capability at Akzhar and Besbolek." 
 
 
For further information please contact: 
 
 
Arawak Energy Limited                           Tel: +44 (0) 20 7973 4285 
Tanya Pang, Head of Investor RelationsFax: +44 (0) 20 7824 8466 
E-mail: info@arawakenergy.com                     Web: www.arawakenergy.com 
 
 
Brunswick Group LLP        Tel: +44 (0)20 7404 5959 
Patrick Handley 
 
 
JPMorgan Cazenove Limited     Tel: +44 (0)20 7588 2828 
Steve Baldwin 
Neil Haycock 
 
 
Oriel Securities Limited             Tel: +44 (0)20 7710 7600 
Richard Crawley 
Natalie Fortescue 
 
 
Notes to editors 
 
 
Arawak's Common Shares are listed for trading on both the Toronto Stock Exchange 
("TSX") and the London Stock Exchange ("LSE") under the symbol "AAK". On 16 
January 2008, Arawak together with Rosco S.A. ("Rosco"), announced that the 
Boards of both companies had reached agreement on the terms of a recommended and 
increased pre-conditional cash offer to be made by Rosco (or a wholly owned 
subsidiary of Rosco) to acquire the entire issued and to be issued share capital 
of Arawak (the "Increased Recommended Offer"). The Increased Recommended Offer 
is being made at a price of CAD 1.00 for each Arawak share. The Board of Arawak 
considers the terms of the Increased Recommended Offer to be fair and 
reasonable. 
 
 
Arawak is engaged in the exploration, development and production of oil and 
natural gas in Kazakhstan, Russia and Azerbaijan. In Kazakhstan, the Company 
holds five producing fields and two exploration blocks. The Company has a 40% 
participating interest in the Saigak producing block acquired in June 2008. The 
remaining assets are held through its 100% wholly-owned subsidiary Altius Energy 
Corporation ("Altius"). Altius' main producing field is Akzhar with smaller 
fields at Besbolek, Karataikyz and Alimbai. The two exploration blocks East 
Zharkamys III and Tamdykol are also situated in western Kazakhstan. Arawak's 
producing assets in Russia are held through ZAO PechoraNefteGas ("PNG") and LLC 
NK Recher-Komi ("Recher-Komi"), in which Arawak has a 50% interest with the 
remaining interest being held by Lundin Petroleum AB. Also in Russia, Arawak 
holds a 100% interest in the Kymbozhyuskaya exploration block and in the South 
Sotchemyu appraisal block. In Azerbaijan, the Company's asset is its interest in 
the Exploration Development and Production Sharing Agreement ("EDPSA") for the 
South West Gobustan oil and gas fields. CGL, a company registered in Anguilla, 
British West Indies, in which the Company has a 37.17% interest, holds an 80% 
interest in the EDPSA with the remaining 20% held by an affiliate of SOCAR. The 
remaining 62.83% share in CGL is held by two affiliates of the project operator, 
CNPC. 
 
 
This announcement includes "forward-looking statements", including statements 
with respect to Arawak's anticipated exploration and development activities 
which are based on the opinions and estimates of management at the date the 
statements are made, and are subject to a variety of risks and uncertainties and 
other factors that could cause actual events or results to differ materially 
from those projected in the forward-looking statements. These risks and 
uncertainties include, but are not limited to, risks associated with the oil and 
gas industry (including operational risks in development, exploration and 
production; delays or changes in plans with respect to exploration or 
development projects or capital expenditures; the uncertainty of reserve 
estimates; the uncertainty of estimates and projections in relation to 
production, costs and expenses and health, safety and environmental risks), the 
risk of commodity price and foreign exchange rate fluctuations, the uncertainty 
associated with commercial negotiations and negotiating with foreign governments 
and risks associated with international activity. Although Arawak believes that 
its expectations represented by these forward-looking statements are reasonable, 
there can be no assurance that such expectations will prove to be correct. Due 
to the risks, uncertainties and assumptions inherent in forward-looking 
statements, prospective investors in the Company's securities should not place 
undue reliance on these forward-looking statements. For a detailed description 
of the risks and uncertainties facing Arawak, readers should refer to Arawak's 
Annual Information Form for the year ended 31 December, 2007 and dated 31 March, 
2008 as filed at www.sedar.com. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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