Petroneft Resources PLC Reserve Update (8627W)

TIDMPTR

RNS Number : 8627W

Petroneft Resources PLC

24 April 2019

PetroNeft Resources plc

   24(th) April   2019 

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

Increase in Reserves for Licence 67 following drilling success

PetroNeft (AIM: PTR) an oil & gas exploration and production company, operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67 (the remaining 50% held by Arawak Energy), is pleased to give the following update in relation to reserves at its Licence 67.

Highlights

   --     New reserves approved for Licence 67, Cheremshanskoye field. 
   --     Approximately 19.26 mmbbls of C1 + C2 reserves (gross) for the Jurassic Reservoirs. 
   --     Currently examining development options for Licence 67. 
   --     Material additional exploration potential of the overlying Cretaceous section being studied. 

Reserve Boost

Following on from the successful drilling on Licence 67 of the C-4 appraisal well on the northern part of the Cheremshanskoye field, PetroNeft has received approval from the State Reserves committee (GKZ) for C1 + C2 reserves of 2.5 Mtons (this is approximately equal to 2P reserves of 19.26 mmbbls). The reserves approved are in the Upper Jurassic (J1) and Lower Jurassic (J14) intervals.

PetroNeft's internal assessment of the field further indicates potential for reserves to more than double in the future, as the current reserves do not reflect the full potential for the Jurassic intervals within this large four-way dip closed structure which extends over 46km(2).

The Company is also evaluating the prospectivity in the overlying Cretaceous play within the Cheremshanskoye and Ledovoye fields. Historically the Cretaceous play has been difficult to target due to siting wells on 2D seismic data. Both the Cheremshanskoye and Ledovoye fields are covered with high quality 3D seismic data which the Company believes could be the key to unlocking the full potential of this exciting additional play.'

David Sturt, the Company's Chief Executive Officer ("CEO").

'This is a great step forward for the company following the drilling of the successful C-4 well in 2018. Now that we have reserves independently approved, we can start evaluating development options for the field with our partner.

We are very excited about the ultimate potential of this field as we now have oil proven at both ends of this substantial structure. In addition to the reserves which are now proven in the Jurassic sands, we are also very encouraged about the potential within the Cretaceous interval where oil was identified in the C-4 well but could not be tested for operational reasons."

Licence 67 in detail

The Cheremshanskoye field lies in the southern half of Licence 67 which PetroNeft operate with a 50% working interest, the remaining 50% held by our partner Arawak Energy. The field lies to the south and adjacent to the producing Lomovoye field (operated by Tomskneft) and to the south of Licence 67 lies the giant South Cheremshanskoye field.

In addition to the Cheremshanskoye field, in the north west part of the licence lies the Ledovoye field where oil has previously been encountered in the Jurassic and Cretaceous reservoirs in three previous wells. Oil has been tested here in the Upper Jurassic J1 interval, but the Cretaceous B16-17 interval was not tested due to operational problems. We are currently assessing what we believe to be the considerable potential of this earlier discovery.

In addition to the proven Jurassic intervals in the Cheremshanskoye field, we are also looking at the exploration potential of the overlying Cretaceous intervals which are very prolific in the South Cheremshanskoye field immediately to the south.

The licence was acquired via state auction in 2010. Two prior exploration wells (C-1 and C-2) had been drilled on the Cheremshanskoye structure during Soviet times. PetroNeft identified potential bye-passed pay in these wells and drilled the C-3 delineation well in 2011 and tested oil in the J14 and J1 Jurassic intervals. 3D seismic data was acquired over Cheremshanskoye in 2014 and the C-4 well was drilled on the north end of the structure in 2018. The C-4 well encountered approximately 10.3 m of net oil pay in the J1 interval with very good open-hole and cased-hole testing indicating that the well will produce over 400 bopd on pump. Oil was identified on logs in the Lower Cretaceous B-18 interval in the C-4 well but was not tested.

For further information, contact:

 
 David Sturt, CEO, PetroNeft Resources plc               [phone] 
 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. David Sturt, Chief Executive Officer and Executive Director 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. Sturt holds a B.Sc. Degree in Earth Sciences from Kingston University and an MSc. in Exploration Geophysics from The University of Leeds. He is a member of the Petroleum Exploration Society Great Britain and has over 35 years' experience in oil and gas exploration and development.

Glossary

 
 bbls          Barrels 
 bopd          Barrels of oil per day 
              ------------------------------------------------------ 
 m             metres 
              ------------------------------------------------------ 
 mmbbls        Million barrels 
              ------------------------------------------------------ 
 Mtons         Million Tons 
              ------------------------------------------------------ 
 Net oil pay   A reservoir or portion of a reservoir that 
                contains producible hydrocarbons. 
              ------------------------------------------------------ 
 C1 + C2       Russian State Reserves C1 + C2, equivalent 
                to 2P (Proven and Probable) 
              ------------------------------------------------------ 
 2P            Proven and Probable reserves under the Society 
                of Petroleum Engineers Petroleum Reserves Management 
                System 
              ------------------------------------------------------ 
 

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April 24, 2019 02:00 ET (06:00 GMT)