Matra Petroleum (LON:MTA) , the AIM listed oil and gas group operating in Russia, has been awarded a 20 year production licence for its Sokolovskoe Field. The news comes a week after Matra reported that a drilling rig was being mobilised to Well-12 on Sokolovskoe ahead of plans to re-drill a section of that well. At its other well on the field, Well-13, Matra previously reported that remedial cementing operations had been completed and after a short period of testing it would begin installing surface production equipment. Today’s news sent shares in Matra up by 23% to 3.25p.

Peter Hind, Matra’s managing director, said: “This is a major step for Matra and will allow us to renew our efforts to build a bigger business in the region. The production licence confirms Matra’s right to develop and produce oil from the Sokolovskoe Field for the next 20 years and is extendable thereafter. This will allow us to push ahead with the full development of the Sokolovskoe Field and to establish significant production and cash flow. Our operations to restore production from wells 12 and 13 are proceeding and we will report progress in due course.”

Well-12 was Matra’s original discovery well and was drilled on Sokolovskoe in late 2007. That was followed by Well-13, which was drilled in October 2009 and completed in May this year. The company has faced technical problems with Well-12 in attempting to establish a circulation path between the oil and water zones to allow cement isolation in the well. Following a technical review, the company concluded that further attempts to isolate water in the well were unlikely to be successful and decided that it should be sidetracked some 50 meters from the existing bottom hole location where drilling was halted within the oil zone (without penetrating water bearing formations) and then recompleted for production.

The latest competent persons report by Equipoise Solutions puts the contingent recoverable resources (2C) for Sokolovskoe at 15.1m barrels, with a net present value of $60-80m. Additional seismic work and more wells are expected to be needed around the area of Well-13 in order to bolster contingent recoverable resources in the future.

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