The Board of Jupiter Energy Limited provided this update regarding progress with achieving 100% gas utilization on the Akkar North (East Block), Akkar East and West Zhetybai oilfields. The Company has been developing its asset in Kazakhstan for the past fourteen years, moving from the licensing of pure exploration acreage, the drilling of exploration wells in different sections of its 123km2 acreage and, ultimately, the discovery of 3 oilfields. The Company has recently transitioned from its Exploration License to a Commercial License. The installation and commissioning of its 100% gas utilization infrastructure is integral to its next stage of future growth. Strategic Importance of 100% Gas Utilization Infrastructure: As previously announced to shareholders, all oil currently produced by Jupiter is sold into the Kazakhstan domestic oil market, as is required under Kazakh Sub Surface law, when wells are either producing under a Trial Production License or during the "Preparatory Period" of a Commercial Production Licence. The "Preparatory Period" applies to an operator that is transitioning between Trial Production (during which time associated gas from production can be flared) to Commercial Production, under which an operator must have access to the requisite infrastructure to provide for 100% utilization of all associated gas produced whilst wells are in production. During the "Preparatory Period", Jupiter is able to produce from any well located on a field with an approved Commercial Production Licence without having the requisite gas utilization infrastructure in place, only if all associated gas that is produced during production is used on the field for power, heating and the like. A lack of such approved infrastructure means that Jupiter's production is currently constrained on the Akkar North (East Block) and Akkar East fields as both fields are operating under "Preparatory Period" restrictions. Total production from the 4 production wells located on these 2 fields is currently restricted to ~30 tonnes (~225 barrels) per day. The West Zhetybai field is in the process of gaining the necessary approvals to transition from Trial Production to Commercial Production and the J-58 well has been shut in since this approval process commenced. The implementation and approval of a cost effective 100% gas utilization solution is pivotal to enabling the Company to return all its current 5 production wells, located on the Akkar North (East Block), Akkar East and West Zhetybai oilfields, to optimal production. Production from these 5 wells should, based on past performance, provide a cumulative total of ~100 tonnes (~750 barrels) per day. Going forward, the installation of 100% gas utilization infrastructure will also enable the Company to be positioned to seek approval from the Kazakh Ministry of Energy to sell its oil into the export market. Progress with implementation of the Gas Utilization Plan: The Company is pleased to confirm that the relevant Kazakh regulatory authorities have approved Jupiter's Gas Utilization Plan and the Company can now move to the construction phase. As detailed in Jupiter's 15 March 2022 announcement to shareholders, Stage 1 will be based on a decentralized configuration, with a gas to electricity generator being installed at each producing well head. The solution is cost effective, reasonably simple to install and will enable the Company to return all five (5) wells to optimal production in the shortest possible timeframe.
The 5 gas to electricity generators are expected to be delivered to the field(s) in two shipments - one in mid December 2022 (3 generators) and the other in mid January 2023 (2 generators). A tendering process is complete and local contractors have been selected to build the field infrastructure that is required to install the gas generators. Work is scheduled to commence by mid November 2022 and is expected to be completed by mid January 2023. All infrastructure will be connected as soon as feasible after delivery of the generators and assuming the timelines are achieved and there are no delays as a result of poor weather or final inspection approvals, optimal production should commence during 1Q. Debt Restructure Plan/Future Funding: As detailed in Jupiter's 04 October 2022 announcement to shareholders, the Company has agreed a debt restructure plan with its four Noteholders that, subject to shareholder approval at the upcoming 09 December 2022 Annual General Meeting, will see the Company's debt significantly reduced. Achieving 100% gas utilization as well as restructuring the Balance Sheet should position the Company for a strong 2023, both operationally and in terms of its ability to attract follow on investment to further develop the Akkar North (East Block), Akkar East and West Zhetybai oilfields, through the drilling of more production wells.