NGPT Reserves

    RNS Number : 3744H
  Timan Oil & Gas Plc
  04 November 2008
   


    Timan Oil & Gas plc ("Timan" or the "Company")

    Increase in NGPT State Registered Reserves

    Timan is pleased to announce that following the submission of technical data, the Russian State Reserves Committee ("GKZ") met on 18
July 2008 and approved new reserves for the Nizhnechutinskoye Field ("NGPT Field"). Subsequently on 30 September 2008 the Russian Federal
Subsoil Agency ("Rosnedra") registered these reserves into the State Register of Natural Reserves as follows:
    
    * 235.8 million tonnes of Category C1+C2 unrisked original oil in place ("OOIP") (approximately 1,722 million barrels), which includes
109.6 million tonnes of Category C1 reserves (approximately 800 million barrels);

    * 86.4 million tonnes of Category C1+C2 recoverable reserves (approximately 631 million barrels) which includes 40.9 million tones of
Category C1 reserves (approximately 299 million barrels).  
    The previous estimated Category C1 + C2 recoverable reserves for the NGPT Field, stated in accordance with the Russian classification,
were 4.9 million tonnes (around 35.2 million barrels) including 0.3 million tonnes of Category C1 reserves (approximately 2.3 million
barrels) as of November 1999. The increase is as a result of the substantial amount of new technical data gathered since then and recently
submitted to GKZ.

    Miller and Lents Ltd, the Company's independent reserves auditor, assessed the NGPT Field as containing 191.3 million barrels of 2P
(Proved plus Probable) Reserves under the SPE Standard in June 2006. It should be noted that there are fundamental differences between the
Russian Classification System and SPE Standard, which make direct comparison of resource/reserve numbers problematic. In addition the
Russian State Classification system is not a recogonised standard under the AIM Rules, and as such the Company is required to obtain an
updated assessment under the SPE Standard as soon as practicable. Therefore Timan will shortly submit a documentation package to Miller and
Lents for the purpose of obtaining a revised assessment. Any reassessed SPE numbers are likely to differ from the Russian Classification
numbers disclosed above. 

    As the Company announced on 9 October 2008, given the financing which the Company has recently obtained, management is now focused on
recommencing drilling operations at NGPT in the middle of November 2008. The Company intends to drill a further 25 wells to expand the
existing NGPT 25 well Pilot Program in cooperation with its German drilling contractors BLZ (BLZ-Geotechnik GmbH). 

    Alexander Kapalin, CEO of Timan commented: "The new sizable increase in the NGPT Russian State registered reserves is a significant step
forward for the Company's profile in Russia. However we keep focused on realizing production from these reserves and extracting oil in
commercial quantities. We continue to pursue the immediate objective of drilling further wells using the improved well design and completion
techniques, scaling up to the full field development, and we look forward to achieving a significant increase in oil production."    

    Enquiries:

    Timan Oil & Gas plc
    Alexander Kapalin, Chief Executive Officer
    David Herbert, Chairman
    [phone]

    Strand Partners Limited
    Simon Raggett/Rory Murphy
    + 44 (0) 20 7409 3494

    Merlin
    David Simonson
    + 44 (0)7831 347222
    Leonid Fink
    + 44 (0) 20 7653 6620

    Background:

    The NGPT Field with its net land position of 1,260 km2, is held through a combined licence that runs until April, 2024. The Field is
located in the Timan-Pechora region, 17 kilometres from Ukhta, a major town in the Republic of Komi. The field is situated approximately
1,200 km from Moscow. Its surrounding areas have well established infrastructure, allowing all year access for field operations.

    The NGPT shallower reservoir, known as Reservoir I, contains a light, low viscosity, sweet crude oil (34 degrees API), in contrast to
the heavier oils found in the underlying Reservoirs A and II. 

    Technical Review

    The technical information and opinions contained in this announcement have been reviewed by Alexander Petukhov, the Company's Deputy
General Manager of LLC Neftegazopromyslovye Teckhnologii who is a qualified mining engineer and geologist and a member of the American
Association of Petroleum Geologists.

    Glossary:

    C1 - Under the Russian Classification system represents the reserves of a deposit (or of a portion
    thereof) whose crude oil or natural gas content has been determined on the basis of commercial flows of crude oil or natural gas
obtained in wells (with some of the wells having been probed by
    a formation tester) and positive results of geological and geophysical exploration of non-probed wells. C1 Reserves are computed on the
basis of results of geological exploration work and production drilling and must have been studied in sufficient detail to yield data from
which to draw up either a trial industrial development project in the case of a natural gas field or a technological development scheme in
the case of a crude oil field.

    C2 - Under the Russian Classification system these reserves are preliminary estimated reserves of a deposit calculated on the basis of
geological and geophysical research of unexplored sections of deposits adjoining sections of a field containing reserves of higher
categories and of untested deposits of explored fields. Category C2 reserves are used to determine the development potential of a field and
to plan geological, exploration and production activities. 

    2P - Proved and Probable reserves under the SPE classification system.

    Proved Reserves - Under the SPE classification system those quantities of petroleum which, by analysis of geological and engineering
data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under
current economic conditions, operating methods and government regulations.

    Probable Reserves - Under the SPE classification system those quantities of petroleum which are based on similar geological and
engineering data used to estimate proved reserves but because of uncertainties are precluded from being classified as proved and data
suggests they are more likely to be recoverable than not.

    SPE - Society of Petroleum Engineers

    For background information on the company please see www.timanoilandgas.com


This information is provided by RNS
The company news service from the London Stock Exchange
 
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