Petroneft Resources PLC Operations Update (9911N)

TIDMPTR

RNS Number : 9911N

Petroneft Resources PLC

22 May 2015

22 May 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

Sibkrayevskoye

-- Sibkrayevskoye No. 373 appraisal well flows 100 bopd (stabilised, unstimulated natural flow) and confirms 11.5 m net oil pay. Flow rates with a pump would be considerably higher.

   --    Acquisition of 1,000 km of high quality 2D seismic completed. 

Tungolskoye

-- Tungolskoye pipeline and utility line to Lineynoye have been completed and are currently being commissioned.

   --    Tungolskoye T-51B vertical production and control well spudded. 

Other fields

   --    Arbuzovskoye Pad 1 drilling programme successfully completed. 
   --    L-10 horizontal well spudded on the West Lineynoye L-8 structural lobe. 

Production

   --    Current production about 1,950 bopd. 

Sibkrayevskoye

The Sibkrayevskoye No. 373 appraisal well has been successfully drilled and tested. The well was designed as a follow-up to the S-372 discovery well, which was drilled in 2011, to further delineate the Sibkrayevskoye oil field. Log and core data over the primary J1 sandstone reservoir interval indicate 11.5 m of net oil pay. A cased-hole drill stem test of the interval -2,329 to -2,346 m tvd flowed at a stabilised rate of 100 bopd on a 4 mm choke (unstimulated natural flow). Flow rates with an Electrical Submersible Pump would be considerably higher. The reservoir interval is completely saturated with oil to its base and is located about 19 m structurally higher than the equivalent oil saturated interval in the S-372 well, which is also oil saturated throughout.

Prior to the S-373 well Ryder Scott estimated the 2P reserves at over 50 million bbls, making this the largest oil field discovered on License Block 61 to-date. Additional seismic data has also been acquired over the structure this past winter as part of a 1,000 km 2D seismic acquisition programme in the northern part of Licence 61. A development decision is expected in Q3 2015 with a view to the field being brought into production in 2016 utilising a combination of horizontal and vertical wells. A reserve update will be prepared at the end of the year incorporating the new seismic and well data.

Tungolskoye Development

The construction of the 25 km pipeline and utility line to connect the Tungolskoye field back to the Lineynoye Central Processing Facility ("CPF") has been completed ahead of schedule and are currently being commissioned. The pipeline is currently being filled with oil from the T-5 well.

The Tungolskoye T-51B well has been spudded. This well is designed as a vertical producer and stratigraphic control well in the south western part of the field. The results from this well will be incorporated into the reservoir model to design the well paths for two subsequent horizontal wells in this portion of the field. In all, it is anticipated there will be 5-6 horizontal and 5-6 vertical wells drilled as part of the Tungolskoye development.

Arbuzovskoye

The Arbuzovskoye Pad 1 drilling campaign has been successfully completed. The drilling has confirmed oil in the southern lobe of the structure and the oil-down-to has been extended to the spill point of the structure. Additional seismic has also been acquired on the field this winter as part of the 1,000 km seismic acquisition programme. We are planning to develop the southern lobe of the structure in 2016 with a combination of vertical and horizontal wells which could be quickly tied-in to existing facilities to enhance production. Given the uniformity of the J1-1 sandstone and good flow rates in the vertical wells at Arbuzovskoye, we expect very good results by developing the southern lobe with horizontal wells in the J1-1 reservoir.

West Lineynoye

The L-10 horizontal well has been spudded. This well is designed as an initial vertical pilot to test the J1-1 and J1-2 reservoir intervals to the east of the L-8 well followed by a 300 m horizontal segment in the J1-1 interval. The well will intercept the J1-1 reservoir about 30 m higher on the structure to the L-8 exploration well which is currently producing 50 bopd from a vertical section of the J1-1 sandstone. The well will be drilled from a surface location near the L-8 well and can immediately be tied-into the Lineynoye CPF utilising the existing L-8 infrastructure.

Production

Current gross production at Licence 61 is about 1,950 bopd.

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

"We are very pleased with the S-373 well results. We have confirmed good continuity of the main reservoir interval and an encouraging unstimulated oil production rate of 100 bopd with natural flow. Flow from the well with a pump would be a multiple of this level. Based on the well results and an initial review of the new seismic data it is likely that the field will ultimately prove to be larger than the currently estimated 50 million barrels 2P.

We are also pleased that new production wells are now underway at both the Tungolskoye and Lineynoye oil fields. Current production is about 1,950 bopd and based on recent results, we continue to expect to almost double this figure by the end 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/Shabnam Bashir, Citigate Dewe Rogerson           9571 
                                                           +353 1 498 
 Joe Heron / Douglas Keatinge, Murray Consultants                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 
              ----------------------------------------------------- 
 km            Kilometres 
              ----------------------------------------------------- 
 mmbbls        Million barrels 
              ----------------------------------------------------- 
 TVD           True vertical depth 
              ----------------------------------------------------- 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCBCGDUDGDBGUB