Roxi Petroleum: Heavy Drilling Fluid Issues Being Resolved, High Quality Oil Being Produced

Roxi, the Central Asian oil and gas company with a focus on Kazakhstan, is pleased to update the market with progress at its flagship asset BNG as follows:

Shallow Wells

Well 143

Well 143, which was the first of the shallow wells for 2013, was spudded on 1 April 2013, on the MJ-F structure located towards the North of South Yelemes field at BNG. The total depth of the well is 2,750 meters.

As previously reported two intervals at 2,693 meters and 1974 meters have already been tested with good oil shows encountered. Also previously reported was the high quality of oil recovered, which has an oil density of 39 degrees API (American Petroleum Institute).

Five additional intervals; between 2,410 and 2,413 meters; between 2,370 and 2373 meters: between 2,328 and 2,331 meters; between 2,219 and 2122 meters; and between 2,193 and 2,198 meters (in total 17 meters) have been perforated, all in the Jurassic.

The Company is pleased to report that Well 143 has flowed strongly since the New Year and continues to flow well.

The average daily flow rates (barrels of oil per day (‘bopd’)) using different choke sizes have been as follows:

3 mm choke 520 bopd.

5 mm choke 675 bopd.

7 mm choke 815 bopd.

Deep Wells

Deep Well 801

As previously reported Deep Well 801, which was drilled to a depth of 5,050 meters has suffered from blockages caused by excess drilling fluids.

Roxi is pleased to announce that, following a prolonged wash using less dense mud injected under pressure, intended to lessen the density of the drilling fluids and ease their recovery, the well has flowed intermittently over a period of 2 days.

The well has now been closed to allow the removal of drill-pipes. The well is next expected to be placed on test within the next few weeks. Roxi will provide an update once unimpeded flow rates have been determined following such testing.

Deep Well A5

As previously announced Deep Well A5 was drilled to a depth of 4,442 meters. Unrecovered drilling fluids have blocked the well during preparation for testing but for a brief period of up to two hours at a time the well flowed oil at the rate of 2,000 bopd before becoming blocked by the accumulation of unrecovered heavy drilling fluids becoming set in the oil pipe.

The next phase of cleaning up this well is expected to commence towards the end of January 2016 with the delivery of new coil tubing equipment to remove the excess drilling fluids previously reported. In the meantime the well is periodically opened to bleed off excess drilling fluids.

Deep Well A6

As previously announced Deep Well A6 was spudded in early November 2015 and is to be drilled to a planned total depth of 5,000 meters.

Drilling has reached a depth of 3,140 meters without incident and the well remains on target to reach total depth at the end of February 2016.

Comments:

Clive Carver, Chairman said

“We are naturally pleased with the significant improvement in flow rates at Well 143 following the perforation of the new intervals. As previously noted we have high hopes for this well and the structure on which it sits.”

“We remain encouraged by the progress at the deeper wells and look forward to a time when we can update the market with uninterrupted flow rates.”

Qualified Person

Mr. Nurlybek Ospanov, Roxi’s senior geologist who is a member of the Society of Petroleum Engineers (“SPE”), has reviewed and approved the technical disclosures in this announcement.