HOUSTON, March 8, 2004 (PRIMEZONE) -- Transmeridian Exploration, Inc. (OTCBB:TMXN) announced today it has spud South Alibek 5 (SA-5), the fourth well of an initial seven well drilling program in the South Alibek Field. This well is the third well along the crest of the field on the eastern boundary of the South Alibek Field adjacent to the Alibekmola Field. The well is located approximately midpoint between SA-1 and SA-2, which are 1.5 miles apart. The fifth well, SA-17, is planned to be spud within the next two weeks. This well is a twinning of well 29, which was plugged last year due to mechanical problems, but had been on production prior to this problem. SA-17 is a half mile south of SA-1. The company currently has SA-1 on test production and SA-2 and SA-4 have recently been completed. The program depth for the two new wells is currently planned for 13,780 feet with the same KTI and KTII carbonate targets as the previous wells drilled in the field.
A testing program in both SA-4 and SA-2 is under way by the Company's contractor Schlumberger. The program is designed to evaluate reservoir extensions as well as evaluation of production capacity of the wells. After results are obtained from initial perforations, additional perforations are planned, to be followed by acid stimulation, which has been found to be successful in improving reservoir productivity. Both wells will then undergo an extended period of production testing as is being done with SA-1. Additional details on the results will be provided after a sufficient amount of work has been completed and information on the results evaluated.
SA-1 continues to be under a production flow rate evaluation program, with around 170,000 barrels of oil produced since production testing began in July last year. In January, an additional 23 feet of perforations were made in several intervals up to 450 feet deeper than the lowest productive zone, at a depth of 11,915 feet. This was followed by acid stimulation. The well was subsequently tested on 15mm and 17mm choke sizes, with indications that larger choke sizes are still possible. Additional planning is underway to perforate additional intervals in this well. Because of the number of productive zones opened, the well will require a dual completion to allow the various intervals to contribute to the well's total production. Under current well mechanics and production choke size, the upper zones are not contributing to the total production due to differences in formation pressures. Isolating the upper zones from the lower zones will allow the company to produce each zone under its optimum choke settings. During the month of February, the monthly total production increased to 30,000 barrels of oil, a 15% increase over the average of the previous five months. Based on reservoir data, the company estimates that improved rates could be expected following the dual completion.
The Company is planning to continue running two drilling rigs all year with a possible expansion for more rigs next year. It is expected that production test volumes will increase due to this work program. It is difficult for the company to forecast test volumes as production is often interrupted to perform pressure and flow evaluations. Temporary tank and treating installations have been designed to handle the anticipated combined production from these wells. The field's first phase production facilities are in the final stages of installation, but at least two more months of work will be required prior to commissioning. The Company expects to continue trucking of test crude until a de-mercaptane plant and a pipeline pump and metering station is installed some time next year.
About Transmeridian Exploration, Inc.
Transmeridian Exploration, Inc. (TMXN) is an independent energy company established to acquire and develop oil reserves in the Caspian Sea region of the former Soviet Union. TMXN primarily targets medium-sized fields with proved or probable reserves and significant upside reserve potential. Its first major project is the South Alibek Field in Kazakhstan. As of December 31, 2002, the Company's proved reserves in the Field were 17.1 million barrels, with ultimate potential of the field estimated to be 378 million barrels of oil. Ryder Scott Company is currently updating reserve estimates for the field.
For more information, please contact the following:
Transmeridian Exploration, Inc. ROI Group Associates, Inc. 397 N. Sam Houston Pkwy E. Suite 300 39 Broadway, Suite 2410 Houston, TX 77060 New York, NY 10006 Lorrie T. Olivier, CEO Robert Giordano Tel: (281) 999-9091 Tel: (212) 495-0200 x10 Fax: (281) 999-9094 Fax: (212) 495-0746 E-mail: tmei@tmei.com E-mail: rgiordano@roiny.com Website: www.tmei.com
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. TMEI 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" and "recoverable reserves" 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."