HOUSTON, Jan. 30, 2004 (PRIMEZONE) -- Transmeridian Exploration, Inc. (OTCBB:TMXN) announced today that preliminary logging results from the newest well, South Alibek No. 2 (SA-2), indicate the presence of significant oil pay. Oil-bearing reservoir zones have been identified in both the KTII and KTI carbonate formations. This crestal well confirms the field structure and indicates the presence of the reservoir zones significantly north of previous wells. Initial estimates are 440 feet of apparent net oil pay in the KTII reservoirs and 280 feet in the KTI reservoirs. These preliminary results are comparable to the oil pay thicknesses in the other wells in the field, Alibekmola 29, South Alibek No. 1 and No. 4. Production casing has been set to a depth of 13,800 feet in preparation for the well testing program.
SA-2 is the third well completed in our initial drilling program in the South Alibek Field. It is the northern-most well drilled along the crest of the field, 1.5 miles north of our producing well SA-1, and nearly 3 miles from the recently drilled SA-4. The SA-4 and SA-2 wells will be put on test production, and with the current production from SA-1, the crude oil will be trucked to local markets.
The Company estimates that approximately 1250 acres has been delineated by the three new wells, over an area of the field that is three miles in length and half a mile in width. Within this area, the estimated average net pay is 415 feet in the KTII and 303 feet in the KTI. This comprises a large section of the field's crestal area. The Company estimates the field could have an areal extent exceeding 10,000 acres based on the available seismic data, most of which still remains to be confirmed by future wells.
Ryder Scott Company estimated gross Proved reserves of approximately 21 million barrels for year-end 2002 prior to the commencement of this initial drilling program, and are contracted to provide independent estimates of Proved reserves for the 2003 year-end filing with the SEC. Proved reserves are primarily based on actual drilling results, and with the three new wells, the Company has an expectation that these proved resources could increase by 3 times previous estimates. Transmeridian's net interest in these resources is now 50% (40% net of the Kornerstone back-in after payout).
Management Comments
"This is a significant well for Transmeridian. It confirms the continuation of the field's crestal area 1.5 miles north of the previous well control; indicates the presence of the same reservoirs as seen three miles to the south and provides the basis for proving up more of our resources, as does SA-4," commented Bruce Falkenstein, Vice President Exploration & Geology. "Based on preliminary results of the logging, SA-2 and SA-4 have both indicated a deeper lowest known oil, with potential pay zones identified 650 feet deeper than previously mapped. This discovery of deeper oil pay could increase the field's total volumetrics. Both of these wells will provide much needed information for our future resource outlook."
About Transmeridian Exploration
Transmeridian Exploration, Inc. (OTCBB:TMXN) is an independent oil and gas company with headquarters in Houston, Texas. Founded in 2000, its primary objective is to acquire and develop oil properties in the Caspian Sea region of the former Soviet Union. TMXN primarily targets medium-sized fields with proved and probable reserves and upside reserve potential. Its first major project is the South Alibek Field in Kazakhstan.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities and Exchange Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created therein. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including but not limited to those discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2002. Although Transmeridian Exploration, Inc. believes the assumptions underlying the forward-looking statements contained herein are reasonable, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion herein should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved. TMXN discloses proved reserves that comply with the Securities and Exchange Commission's (SEC) definitions. Note that the Company's use of terms such as "ultimate potential", "recoverable reserves", "probable reserves", "possible reserves" and "resources" include quantities of oil that are not yet classified as proved and which the SEC guidelines do not allow us to include in filings with the SEC.