"Armax Gaz" has joined forces with a British company to exploit an oil deposit

• The company is getting ready to move from the Rasdaq to the main tier of the Bucharest Stock Exchange

Equipment maker for the energy industry "Armax Gaz" Mediaş (symbol: ARAX) has teamed up with British company "ZETA Petroleum" to exploit the oil deposit of "Jimbolia", located 40 kilometers away from Timişoara, near the border between Romania and Serbia. "Armax Gaz" owns 50% of the concession rights over the perimeter in question.

In the beginning of last month, "Armax Gaz" has announced that it began work on the testing and drilling of the Jimbolia Veche perimeter, in order to evaluate its potential in oil production, information provided by the company states.

"We are talking about the deposits of Jimbolia Veche, where Armax Gaz is a joint owner. I expect this perimeter to become operational next year, and we will sell the oil output on the domestic market", said for BURSA, Mircea Simion Vescan, the chairman and managing director of the company, who added: "I did what we should have done ever since the 90s, namely have a domestic company exploit this domestic resource".

In order to implement the company"s plan to expand into oil exploitation and distribution, in May"s general meeting, the shareholders approved four contracts for the production and sale of natural gas with a joint value of a maximum of 24 million Euros.

Little concrete information has circulated on the plans of the majority shareholder of "Armax Gaz", as Mircea Vescan wants to keep the secret on what he expects to find at Jimbolia, aside from crude and natural gas.

"It"s the biggest investment of my life, but you will only find out more on what we are going to do there next year", said Vescan.

"Zeta Petroleum", the associate of "Armax Gaz" in the Jimbolia project has acquired the license to exploit the oil deposit in August 2007, when it signed a concession contract with the National Agency for Mineral Resources (ANRM). In mid June this year, "ZETA" concluded a partnership with "Armax Gaz", following which it gained 50% of the lease of the Jimbolia perimeter.

"ZETA" has completed an evaluation of the structure of the "Jimbolia Veche" deposit, and the data resulting from the study suggests that the reserves of the deposit could range from 1.3 and 6.5 million barrels, according to information on the website of the British company.

• Mircea Simion Vescan: "I will help the BSE by moving Armax to the Bucharest Stock Exchange"

Even though he used to say that he wanted to list "Armax Gaz" on a foreign stock exchange, Mircea Vescan seems to have finally accepted to transfer the company from the Rasdaq to the Bucharest Stock Exchange.

"I will probably act patriotically and help the BSE by moving the company to the main tier, even though my intention was to have it listed on one of the major foreign stock exchanges", said the head of "Armax Gaz" for BURSA.

In the first six months of the year, "Armax Gaz" made a net profit of 4.22 million lei, up from 2.03 million lei in the similar period of 2009.

The company"s turnover increased 140% in the first semester of 2010, compared to the similar period of 2009, to 56.26 million lei, on the back of an increase of its sold output by 102.59%, according to a report remitted by the company"s officials. The output sold amounted to 43.21 million lei.

The company has a market capitalization of 89.64 million de lei, based on the price of 0.145 lei/share recorded in Friday"s trading session. Mircea Simion Vescan has a stake of 39.42% of the shares of ARAX.