HOUSTON, July 8, 2004 (PRIMEZONE) -- Transmeridian Exploration, Inc. (OTCBB:TMXN) announced today that logging results from the South Alibek No. 5 indicate the presence of significant oil pay. Oil bearing reservoir zones have been identified in both the KTI and KTII carbonate formations based on the preliminary interpretation of logging data and available core samples taken during the drilling of the well. Testing will begin this month in the upper KTII. The well is located midway between SA-1 and SA-2, which are 1.5 miles apart, and all three wells are located along the eastern boundary of the South Alibek Field.
Drilling Operations Update
Well SA-5, which was spud on March 8th, has reached total depth of approximately 12,500 feet. The well penetrated all the major productive intervals targeted for this well, which are currently under test in the field. Schlumberger was contracted for the open hole log acquisition and the processing and evaluation was completed utilizing Schlumberger's proprietary ELAN(1) analytical software. Based on evaluation of the logs, the well encountered approximately 380 feet of apparent net pay over four intervals in the KTII, and approximately 160 feet in the KTI. Production casing has been set in preparation for the well testing program. The drilling rig will remain on location temporarily to speed up the testing work.
The first zone to be tested will be the same reservoir currently in production in SA-1. A perforation of 40 feet within a gross pay thickness of 283 feet is initially planned. After flow stabilization, additional perforations within this zone are planned, to be followed by acid stimulation, and the well will be placed on long term production testing. Additional zones could be tested later but it is presently believed that this would require dual completion for optimized production rates from the multiple zones.
Well SA-17 is drilling within the KTI and is currently at a depth of approximately 8,000 feet, with a total target depth of approximately 13,000 feet. This well is a replacement well for No. 29, a well drilled prior to the Company's acquisition of the field which was abandoned due to mechanical downhole problems.
The future location for the Company's sixth well in the South Alibek Field, SA-3, is prepared and the drilling rig will be moved to this location when released from the SA-5. The SA-3 is located approximately half a mile southwest from SA-17.
Management Comments
"We are delighted with the speed of drilling and the quality of this well bore for completion as a productive well," commented Bruce Falkenstein, Vice President Exploration & Geology, "and contractor logging quality has been improved in this turnkey well by using Schlumberger for the logging and evaluation services. The use of one contractor for this work should have long term benefits to the Company as we develop our reservoir models for the field development planning." SA-5 is the second well drilled under turnkey drilling contract with Great Wall of China Drilling Company, and benefited from an improved drilling mud program.
The Company maintains its operational forecast of 7 wells drilled and completed by year end. Initial testing of SA-5 should begin this week along with placing the main producing zones of SA-2 on long term production test. SA-4 will be completed in the KTI interval later this month when acid and perforating equipment arrive on site. This is significant as SA-4 will be the only well in the area completed in this interval.
Lorrie T. Olivier, CEO of Transmeridian, commented, "This has been a technical and operational challenge, but I believe we now have the formula to move ahead with the ambitious drilling and development program we have set for ourselves. Our people have performed well and overcome the challenges presented by these complicated reservoirs. We expect to finish the month with four wells producing and we have installed the facilities to move the oil to export markets by rail. Our drilling program is on schedule and we remain confident in the opportunity presented by the South Alibek Field."
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. or ROI Investor Relations, LLC 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 x15 Fax: (281) 999-9094 Fax: (212) 495-0746 E-mail: tmei@tmei.com E-mail: rgiordano@roiny.com Website: www.tmei.com
(1) Mark of Schlumberger
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 oil resources", "probable reserves", "possible oil resources", "ultimate potential", "resources" 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.