HOUSTON, April 2, 2004 (PRIMEZONE) -- Transmeridian Exploration, Inc. (OTCBB:TMXN) announced today that it has received confirmation of the total resource potential in the South Alibek Field as a result of the recently completed drilling of three wells, SA-1, SA-2 and SA-4 and an extensive geologic and engineering reevaluation of the field. Ryder Scott Company, a US independent engineering company, has been contracted by the Company to provide reserves estimates. As of December 31, 2002 Ryder Scott estimated gross proved reserves of 20.9 million barrels of oil and gross probable resources of 88.5 million barrels of oil. Ryder Scott now estimates 64.7 million barrels of proved oil reserves, three times the previous estimate, and probable recoverable resources of 128.1 million barrels, a 45% increase over previous estimates. Transmeridian Exploration currently owns a 50% interest in the South Alibek Field until the 10% carried working interest reaches payout. The gross ultimate recoverable potential of the field, which includes the proved reserves, probable resources and possible resources, is similarly increased from the previous estimate of 377 million barrels of oil. The extent of the field based on the newly released estimates encompass over 13,000 acres of the 14,111 acre license.
Management Comments
"We are very pleased with the estimates provided by Ryder Scott Company, a leading US company for providing independent estimates of reserves, and is in-line with our expectations," commented Bruce Falkenstein, Vice President Exploration & Geology. "The delineation of the field through drilling our initial seven development wells, combined with results of the extended production testing planned for our wells, is expected to prove up additional reserves from the larger resource base Ryder Scott has estimated for the field." The SA-5 and SA-17 are currently being drilled on proved undeveloped acreage, and if successful will add to the overall production and revenues but are not expected to significantly add to our proved reserves. The four additional wells are planned to be drilled following the completion of SA-5 and SA-17, and if successful they are expected to add proved reserves. "If these ultimate resources can be proved, full field development may require over 50 wells to be drilled during the life of the field."
Operational Update
The SA-5 is currently at a depth of 4,700 feet in a crestal location in the field between SA-1 and SA-2. The SA-17 has reached its first casing point at a depth of 760 feet and will continue on its drilling program during the weekend. SA-17 is a twinning of well 29 that was plugged last year due to mechanical problems. The drilling of both wells started in March, with a target completion in 120-160 days.
In SA-4, 420 feet has been perforated in the lower zones of the KT2 and the equipment is now in place at the well to begin the clean-up. The subcontractor Schlumberger is expected to begin acid stimulation work this weekend. The equipment will then be moved to SA-2 to complete the initial perforations of 450 feet in the lower zones of the KT2, to be followed by the clean-up and acid stimulation. The same completion equipment will then be used to re-complete SA-1 as a dual zone producer by the end of April.
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.
For more information please contact the following:
Transmeridian Exploration, Inc. 397 N. Sam Houston Pkwy E., Suite 300 Houston, Texas 77060 Lorrie T. Olivier, CEO Bruce A Falkenstein, Vice President Phone: (281) 999-9091 Fax: (281) 999-9094 Website: www.tmei.com
Cautionary Note to Investors: The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. The use of terms such as "probable oil resources" in this press release are terms that the SEC's guidelines do not permit us to use prohibit in filings with the SEC. Investors are urged to consider closely the disclosures in our Form 10-K, File No. 333-60960, available from us at 397 N. Sam Houston Pkwy E. Suite 300, Houston, TX 77060, or on our website at www.tmei.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or via the website at www.sec.gov.
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, 2003. 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 "probable recoverable resources", "probable reserves", "probable resources" "possible resources", "ultimate recoverable potential", "ultimate resources", "resource", "resource potential" and "recoverable reserves" include quantities of oil that are not yet classified as proved and which SEC guidelines do not allow us to include in filings with the SEC.