Petroneft Resources PLC Operations Update (8414D)

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RNS Number : 8414D

Petroneft Resources PLC

03 February 2015

3 February 2015

PetroNeft Resources plc

("PetroNeft" or the "Group" or the "Company")

Operations Update

PetroNeft (AIM: PTR) an oil & gas exploration and production company operating in the Tomsk Oblast, Russian Federation, is pleased to provide an update on operations at Licence 61.

Highlights

Tungolskoye

   --     Tungolskoye No. 5 well tested at over 600 bopd and is now in production 
   --     Development of Tungolskoye to proceed immediately 

o 11 well Tungolskoye campaign to commence in Q2 2015

o Tenders awarded for drilling and for the development of additional infrastructure at Tungolskoye

Arbuzovskoye & Sibkrayevskoye

-- Arbuzovskoye 103 well now in production at a stabilised average rate of 125 bopd and confirms southern lobe of field

   --     Arbuzovskoye 104 well drilled with 5.4 metres of net pay, expected on production shortly 
   --     Arbuzovskoye 107 well has been spudded 
   --     Seismic acquisition underway at Licence 61. 
   --     Drilling to commence later this month at Sibkrayevskoye 373 

Production

   --     Total production now about 2,450 bopd (including Tungolskoye No. 5) 

Tungolskoye

The horizontal segment of the Tungolskoye No. 5 well has been drilled and completed in the J1-1 and J1-2 Upper Jurassic intervals. The total horizontal segment was just over 350 metres of which over 80% was located in the productive J1-1 and J1-2 reservoirs at depths between -2,502 m and -2,517 m TVD. The well is still cleaning up and current production is 604 bopd using an Electric Submersible Pump (ESP). The oil is currently being trucked 25 km to the Lineynoye central processing facility.

Development of the Tungolskoye oil field which is estimated to contain 20 mmbbls in 2P reserves will now proceed immediately. Contracts are currently being finalized for the 2015/16 Tungolskoye development drilling programme. The programme is expected to comprise five horizontal and up to six vertical wells. Drilling is expected to commence in April 2015 and will be completed in Q1 2016. Further details will be announced once the drilling contract is executed.

Tenders have also been awarded for the construction of a pipeline and power line to connect the Tungolskoye oil field back to the Lineynoye central processing facility with contracts currently being finalised. All of the necessary drilling and other supplies for this programme have been ordered and are being delivered to the field. Capital expenditure on this project is included in the License 61 development plan agreed between the License Partners and is fully funded.

Arbuzovskoye

The Arbuzovskoye 103 well has been completed and brought into production at an initial rate of 125 bopd. The well was drilled as the maximum reach step out to the south to better define the oil water contact and productivity. The well encountered 5.0 m of oil saturated pay in the J1-1 Upper Jurassic interval at a depth of -2,460 m TVD and confirms oil in the southern lobe of the Arbuzovskoye field. Current plans are to develop the southern portion of the field with a combination of horizontal and vertical wells commencing in 2016.

The Arbuzovskoye 104 well has now been drilled in the northern part of the field adjacent to the A-106 well. The logs indicate that the well has 5.4 m of net oil pay in the J1-1 Upper Jurassic interval at a depth of -2,467 m TVD and looks similar to the adjacent A-106 well which is currently producing about 175 bopd. We are currently completing the A-104 well and anticipate bringing it on production within a week.

The Arbuzovskoye 107 was spudded on 1 February 2015 and is expected to take approximately four weeks to drill. It is located north-west of the A-103 well.

Total production from Licence 61 is currently about 2,450 bopd.

Sibkrayevskoye

The drilling rig for the Sibkrayevskoye No. 373 well is currently being erected. It is expected that drilling will commence later this month.

Work is well underway on the programme to acquire 1,000 km of high quality 2D seismic data across the Sibkrayevskoye oil field and other fields and prospects in the northern portion of Licence 61. The main acquisition of data will continue until April with final interpreted results being available in Q3 2015. This will help formulate our work programme beyond the current drilling campaign at Tungolskoye and Arbuzovskoye in order to develop the Sibkrayevskoye oil field which is estimated to contain 53 mmbbls in 2P reserves.

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

"We are delighted with the result of the T-5 well, our first horizontal well, which has exceeded our expectations and which bodes extremely well for the development of Tungolskoye where we plan a number of longer horizontal segments in an 11 well campaign.

We have also achieved two excellent results at Arbuzovskoye particularly from the A-103 well which has confirmed the southern lobe of the Arbuzovskoye field as well as adding to production, which has grown to 2,450 bopd."

For further information, contact:

 
 Dennis Francis, CEO, PetroNeft Resources       +1 713 
  plc                                         988 2500 
 Paul Dowling, CFO, PetroNeft Resources         +353 1 
  plc                                         647 0280 
 John Frain/Brian Garrahy, Davy (NOMAD          +353 1 
  and Joint Broker)                           679 6363 
 Henry Fitzgerald-O'Connor, Canaccord          +44 207 
  Genuity Limited (Joint Broker)              523 8000 
 Martin Jackson/Shabnam Bashir, Citigate       +44 207 
  Dewe Rogerson                               638 9571 
 Joe Heron / Douglas Keatinge, Murray           +353 1 
  Consultants                                 498 0300 
 

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 Guidance Note for Mining and Oil & 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 40 years' experience in oil and gas exploration and development.

Glossary

 
 2P reserves   Proved and probable reserves as 
                defined by the standards of the 
                Society of Petroleum Engineers 
------------  --------------------------------- 
 bopd          Barrels of oil per day 
------------  --------------------------------- 
 m             Metres 
------------  --------------------------------- 
 mmbbls        Million barrels 
------------  --------------------------------- 
 TVD           True vertical depth 
------------  --------------------------------- 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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