Operations Update

 

TIDMTMAN 
 
RNS Number : 4834S 
Timan Oil & Gas Plc 
19 May 2009 
 

Timan Oil & Gas plc ("Timan" or the "Company") 
 
 
Operations Update 
 
 
Timan Oil & Gas plc is pleased to provide the following update on its operations 
over the first 4 months of 2009. 
 
 
NGPT 
 
 
In spite of previously announced cash flow delays, the Company has drilled 3 new 
wells while progressing its development plans for the field as far as possible. 
 
 
The German drilling contractors, BLZ Geotechnik GmbH ("BLZ"), drilled the first 
two wells of the extended 25 well pilot program using modified drilling 
techniques approved by the Company's technical consultants (G.E.O.S), and taking 
into account previous pilot scheme results. Instead of the usual cement, 
swellable clay (in the form of "clay balls") was used in the completion in an 
attempt to improve production zone isolation. The wells were successfully 
completed at the target depth, cased, equipped with production tubing and 
tested. The well testing continued for 6 days with periodic well production due 
to the limited oil storage facilities at the field. The preliminary test results 
of the first well showed reasonable production rates in line with expectations, 
testing at up to 1 cubic meter (7.3 barrels) of liquid (oil and water) 
production per 1 hour flow period.  The testing of this and the second well is 
continuing. 
 
 
A third well has also been drilled in the extended pilot area using a local 
subcontractor. This well also used new isolation and production techniques (oil 
based mud, more powerful perforators and improved cementing) and showed better 
that expected oil production rates during preliminary testing, which is 
continuing. The well produced 0.25 cubic meters (1.8 barrels) of clean oil with 
gas at a low water cut during 25 min. of testing. 
 
 
It should be noted that the majority of the funds to be received from Kamanisk 
in the next 5 months is likely to be used for general operations and working 
capital purposes. However, the Company has already arranged and paid for 
supplies to drill 10 wells. 
 
 
While drilling progresses, the Company has also started a work program to resume 
oil production at the existing pilot program area drilled in 2007. One well has 
been tested and produced oil and water at a flow rate of approximately 10 cubic 
meters (73 barrels) over a 10 hour period, which was significantly above the 
rate expected. Although this initial high rate is not sustainable, the result is 
nevertheless very encouraging. The same applies to the testing results for the 
new wells. 
 
 
Timan can confirm that the Company has complied with all its licence obligations 
at NGPT and has successfully passed its annual inspection with Rosnedra and 
Rosprirodnadzor.  The development plan for the NGPT Field has been completed 
together with TatNIPIneft, a subsidiary of Tatneft, and is currently awaiting 
approval by the State Development Committee.  As a result Rosnedra is expected 
to approve the issue of required production permits and assign a level of 
production for NGPT. 
 
 
KNG Licence 
 
 
The Company's KNG asset has been operated with minimal expenditure in 2009 but 
the Board can confirm that all required subsoil payments have been made to the 
relevant authorities. The Company is awaiting confirmation from the authorities 
as to what payment is required in order to obtain a production licence for the 
KNG area. It should be noted that the issue of the production license is only 
conditional on this payment since the Company has received the Certificate of 
Commercial Discovery from the Russian Federal Subsoil Agency (Rosnedra). 
 
 
Geoterm 
 
 
Exploration efforts have continued on the Company's blocks in the Caspian Sea. 
On the Izberbash Block, Federal authorities have recently approved the Company's 
exploration programme, following interpretation of extensive 2D seismic, and the 
identification of four potential well locations. 
 
 
Exploration on the Sulak Block will be progressed, subject to funding, with 535 
km of new 2D seismic acquisition planned for 2009, along with an electrical 
survey designed to help high-grade exploration prospects on both blocks.  The 
Company anticipates that acquisition, interpretation and processing of the data 
obtained will take approximately 6 months to complete. Preparations are ongoing 
and Geoterm is currently obtaining necessary approvals for conducting this work. 
 
 
The Company can also report that the Federal authorities have confirmed that all 
its exploration obligations have now been fulfilled on these licenses. 
 
 
 
 
Enquiries: 
 
 
Timan Oil & Gas plc 
Alexander Kapalin, Chief Executive Officer 
Boris Litvak, Non-Executive Chairman 
[phone] 
 
 
Strand Partners Limited 
Rory Murphy/Simon Raggett 
+ 44 (0) 20 7409 3494 
 
 
 
 
Technical Review 
 
 
The technical information and opinions contained in this announcement have been 
reviewed by Dr. Boris Litvak, Non-Executive Chairman, who is a qualified 
reservoir engineer, has over 27 years of experience in oil and gas industry in 
the USA, Europe and Russia and who is a member of the Society of Petroleum 
Engineers. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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