Petroneft Resources PLC Operations update (8319J)

TIDMPTR

RNS Number : 8319J

Petroneft Resources PLC

13 August 2012

13 August 2012

PetroNeft Resources plc

("PetroNeft" or the "Company")

Operations Update

PetroNeft Resources plc (AIM: PTR) owner and operator of Licences 61 and 67, Tomsk Oblast, Russian Federation, is pleased to provide an update on its operations.

Highlights:

   --      Drilling of new production wells commences at Arbuzovskoye 
   --      Two Lineynoye wells converted to water injectors for planned pressure support 
   --      Production stable at 2,000 bopd 
   --      Benefit of pressure support and new production wells anticipated over coming months 

Licence 61 - Arbuzovskoye Pilot Development Programme

Drilling of the first of ten new production wells on the Arbuzovskoye oil field has commenced and is expected to come into production in September 2012. The drilling rig and necessary supplies to drill ten wells were moved to location during Q1 when winter roads were in place to handle the heavy loads.

The Arbuzovskoye No. 1 well is currently producing 300 bopd (with negligible water production) through the recently constructed 10 km spur pipeline to the Lineynoye oil processing facilities. This rate is currently constrained by an electrical fault with the pump that is preventing it from operating at its optimum rate. The pump will be replaced in due course.

Arbuzovskoye contains 2P reserves in excess of 13 million barrels of oil according to independent reserve auditors Ryder Scott and is the Company's second production development.

Licence 61 - Production

Total oil production, comprising both the Lineynoye and Arbuzovskoye oil fields, is currently steady at about 2,000 bopd. In July 2012, two Lineynoye producing wells were converted as planned into water injection wells to provide pressure support in the reservoir; we expect to recover the production lost from these two wells through improved rates in nearby producing wells over the coming months.

Dennis Francis, Chief Executive Officer of PetroNeft Resources plc, commented:

"We are delighted to have commenced drilling of the first of 10 planned new production wells at Arbuzovskoye where our existing well has demonstrated very encouraging production characteristics. We will focus on developing Arbuzovskoye and seek to steadily build on our existing production profile and positive cashflows throughout the remainder of the year."

For further information, contact:

 
                                                         +1 713 988 
 Dennis Francis, CEO, PetroNeft Resources plc             2500 
                                                         +353 1 647 
 Paul Dowling, CFO, PetroNeft Resources plc               0280 
 John Frain/Brian Garrahy, Davy (NOMAD and Joint         +353 1 679 
  Broker)                                                 6363 
 Henry Fitzgerald-O'Connor, Canaccord Genuity Limited    [phone] 
  (Joint Broker)                                          8000 
                                                         [phone] 
 Martin Jackson, Citigate Dewe Rogerson                   9571 
                                                         +353 1 498 
 Joe Murray/Ed Micheau, Murray Consultants                0300 
 

Qualified person

The information contained in this announcement has been reviewed and verified by Mr. Dennis Francis, Director and Chief Executive Officer of PetroNeft, for the purposes of the Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009. Mr. Francis holds a B.S. Degree in Geophysical Engineering and a M.S. Degree in Geology from the Colorado School of Mines. He has also graduated from the Harvard University Program for Management Development. He is a member of the American Association of Petroleum Geologists and the Society of Exploration Geophysicists. He has over 35 years experience in oil and gas exploration and development. The technical disclosure in this announcement complies with the SPE/PRMS Standard.

Forward Looking Statements

This announcement contains forward-looking statements. These statements relate to the Company's future prospects, developments and business strategies. Forward-looking statements are identified by their use of terms and phrases such as 'believe', 'could', 'envisage', 'potential', 'estimate', 'expect', 'may', 'will' or the negative of those, variations or comparable expressions, including references to assumptions.

The forward-looking statements in this announcement are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. These forward-looking statements speak only as at the date of this announcement.

Glossary

 
 2P reserves   Proved and probable reserves according to SPE standards 
 bopd          Barrels of oil per day 
              -------------------------------------------------------- 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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