Petroneft Resources PLC Drilling Update - C-4 Well (9329Y)

TIDMPTR

RNS Number : 9329Y

Petroneft Resources PLC

28 August 2018

PetroNeft Resources plc

28 August 2018

PetroNeft Resources plc ('PetroNeft' or 'the Company')

Drilling Update - C-4 Well

PetroNeft (AIM: PTR) an oil and gas exploration and production company operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67 is pleased to announce that it has successfully cored, logged and open-hole tested the J1-1 and J1-3 intervals of the Cheremshanskoye No.4 (C-4) well in Licence 67.

Highlights

-- Successful well proves up significant northern half of the Cheremshanskoye field with oil tested from two horizons at a combined prorated flow of 399 bfpd, exceeding expectations.

-- The well is the first one drilled with the help of 3D seismic data acquired by PetroNeft in 2014 and is approximately 5km from the previous two oil wells which were drilled along the southern boundary of the field (C-1 & C-3).

-- Result has the potential to increase gross reserves by 40 mmbbls (20 mmbbls net to PetroNeft)

   --     Total net pay across both Jurassic intervals is 10.4 m 
   --     Now moving to secondary J14 objective. 

Licence 67

The C-4 well is located on the northern half of the Cheremshanskoye field in Licence 67. The aim of the well was to prove up the northern extent of the field based on the 3D seismic data. The well is being drilled under the joint venture agreement with our partner for Licence 67, Arawak Energy on a 50:50 basis. The well spudded on 2 August and operations have progressed smoothly.

Based on core and log data the base of the Bazhenov Formation was penetrated at -2,545.5 m TVDSS which is about 9.5 m high to pre-drill estimates.

The tertiary objective Upper Jurassic J1-1 sandstone interval encountered 1.6 m of net oil pay from -2,546 to -2,547.6 m TVDSS and coring recovered oil saturated sandstone with very good visual reservoir properties. A short duration open-hole test was run over the interval and the prorated flow was 228 bfpd consisting of 84% oil (light oil with a density of 0.85 g/cm - 35deg API) and 16% mud/filtrate. This is a very good initial flow test which exceeds our expectations for the J1-1 interval.

The primary J1-3 interval was also cored, tested and logged. Calculations from the log data show net oil pay of 8.8 m from -2,559.4 to -2,569.2 m TVDSS. A short duration open-hole test was run over the interval and the prorated flow was 171 bfpd consisting of 70% oil (light oil with a density of 0.85 g/cm - 35deg API) and 30% mud/filtrate. This is a good flow test which exceeds our expectations for the J1-3 interval, even though the short flow test indicates some formation damage that restricted the flow rate.

The combined open-hole tests achieved a prorated test rate of 399 bfpd. The oil cut is expected to increase in a longer test once drilling fluids are cleared out from the well.

The two open-hole tests combined with the log and core data in the Upper Jurassic are very encouraging. There are currently no reserves booked for the Upper Jurassic at Cheremshanskoye and it is estimated that there could be about 40 million bbls of proven and probable reserves in the Upper Jurassic at Cheremshanskoye based on these results, 20 mmbbls net to PetroNeft.

We have now resumed drilling and will next target the secondary J14 objective in the Lower Jurassic.

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

"We are very pleased with the results of the C-4 well so far as it has demonstrated the value of the Cheremshanskoye field within Licence 67. The well demonstrates the importance of the 3D seismic in being able to confidently select a well location 5km away from the discovery wells.

Although the open hole tests have been of relatively short duration, the additional log and core data are very encouraging with both the J1-1 and J1-3 intervals exceeding pre-drill estimates.

We look forward to sharing the final results when they are available."

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No. 596/2014, and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

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 
                                                          +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

 
 API           The American Petroleum Institute gravity, or 
                API gravity, is a measure of how heavy or light 
                a petroleum liquid is compared to water: if 
                its API gravity is greater than 10deg, it is 
                lighter and floats on water; if less than 10deg, 
                it is heavier and sinks. 
 bbls          Barrels 
              -------------------------------------------------- 
 Bfpd          Barrels of fluid per day 
              -------------------------------------------------- 
 m             metres 
              -------------------------------------------------- 
 mmbbls        Million barrels 
              -------------------------------------------------- 
 Net oil pay   A reservoir or portion of a reservoir that 
                contains producible hydrocarbons. 
              -------------------------------------------------- 
 Tertiary      Third in priority 
              -------------------------------------------------- 
 TVDSS         True vertical depth subsea 
              -------------------------------------------------- 
 Spud          To commence drilling a well 
              -------------------------------------------------- 
 

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August 28, 2018 02:01 ET (06:01 GMT)