Petroneft Resources PLC Company Update (9719Y)

TIDMPTR

RNS Number : 9719Y

Petroneft Resources PLC

10 May 2023

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

Company Update

PetroNeft (AIM: PTR) provides the following update.

-- Stimul-T LLC, operator of Licence 61, voluntarily files for bankruptcy administration in Russia

-- PetroNeft issues Demand Notice to WorldAce Investments Ltd for outstanding Corporate Management Service charges of $0.98M.

PetroNeft together with its joint venture partner Oil India International BV (a wholly owned subsidiary of OIL India Limited) are the only shareholders in a Cypriot registered company called WorldAce Investment Limited (WIL), which in turn owns 100% of the voting equity in Stimul-T LLC (Stimul-T), a Russian registered legal entity, which owns and operates Licence 61 in the Tomsk region of the Russian Federation.

The pipeline connecting Licence 61 to the Transneft system is owned and operated by Nord Imperial (NI), a wholly owned subsidiary of ONGC, the flagship national oil company (NOC) of India . As disclosed by PetroNeft on the 21(st) of August 2022, following a long running tariff dispute between Stimul-T and NI, the pipeline was shut down by NI on the 21(st) of August 2022. Despite numerous meetings between Stimul-T, NI and other stakeholders, and the continuing litigation proceedings, a resolution has not been achieved.

Apart from minor volumes of oil exported during the winter months utilising ice roads, Stimul-T has had to suspend all operation on the oil fields in Licence 61 at the beginning of Q4 last year which has resulted in no revenue to pay its debts as they fall due. These include a RUB 190MM tax debt (US$2.3M equivalent). The Tomsk Regional Court of Arbitrage ruling going against Stimul-T , as announced on the 17(th) March 2023, combined with the inability to be able to transport oil out of Licence 61, has led to the position where Stimul-T is now legally obligated, under the Bankruptcy laws of the Russian Federation, to submit an application for bankruptcy administration.

The bankruptcy process in Russia may be protracted. At this time, the PetroNeft board cannot, with any reasonable certainty, estimate the recoverability, if any, of the loan advance(s), receivables or underlying asset value that accrues to the interest of PetroNeft through its 50% equity holding in WIL and by extension in Stimul-T LLC.

The act of submitting this bankruptcy filing does not affect the on-going operations at Licence 67 which continue without interruption.

Under the Joint Venture Agreement between OIL and PetroNeft, PetroNeft provides certain corporate management services to WIL. The outstanding amount due to PetroNeft as of 31(st) December 2022 was $0.98M and the Company has issued a Demand Letter for immediate payment of this considerable amount.

PetroNeft will issue a further announcement in due course.

David Sturt, Chairman of PetroNeft Resources plc, commented:

"This is a very sad outcome; we have been trying to find a mutually beneficial solution which would have enabled us to continue operations at Licence 61. Although there have been numerous encouraging meetings in Tomsk, nothing has been forthcoming. We will continue to pursue all legal options including the submission of an appeal against the legal case but due to the insolvent position of Stimul-T and no income we have a requirement by law to lodge for bankruptcy of Stimul-T.

If a resolution is found which would enable production to re commence and allow exports through the NI pipeline to market, it may be possible to reverse the bankruptcy process for the benefit of all stakeholders."

This announcement contains inside information within the meaning of the EU Market Abuse Regulation 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For further information, contact:

 
 
 Pavel Tetyakov, CEO, PetroNeft Resources plc              [phone] 
 Brian Garrahy/Ciara Mongain, Davy (NOMAD and Corporate    +353 1 679 
  Broker)                                                   6363 
                                                           +353 1 498 
 Paul O'Kane, Murray Consultants                            0300 
 

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May 10, 2023 06:46 ET (10:46 GMT)