Some of the major oil companies have rather a jaundiced view of Russia. BP, in particular, has had endless troubles in the country. But one of AIM's oil minnows is doing rather well in Russia.  

Matra Petroleum has a single asset, a licence in the Oremburg region, which lies south-east of Moscow, close to the Kazakh border. The licence covers 158 square kilometre, and Matra owns 100%. The licence period runs to the end of 2010; Matra has a four well commitment, and has already drilled two of the wells, with a third already spudded. 

The Volga-Urals hydrocarbon province is highly prospective. To the south of Matra's licence lies the giant Oremburg gas field; the adjacent Mayorskaya field is currently producing light oil. That would all look pretty good as a starting point - and then Matra had the good fortune to make an oil discovery with its first well, A-12, drilled in 2007. 

Unfertunately that's where everything started going wrong. The previous licence holders sued Matra, asserting that its licence hadn't been properly awarded. That then meant Matra couldn't get finance for further development of the licence while the case was sub judice, and couldn't farm out the prospect either. Add to that the 2008 credit crunch and you have a company that was a hair's breadth from going under.  

Matra did all the right things. It delayed further investment on the field, and managed to get the Russian authorities to defer the drilling requirement on the Archangelovskoe licence. It secured interim funding from major shareholder Delek, and sold off its Hungarian assets to concentrate on the Russian licence.  

Gas had been found in Hungary, but like the Russian prospect, the Hungarian venture needed further funds to progress - and it didn't offer the same potential returns as the Russian one. Besides, with no court case pending, and an existing partner, selling off the remaining percentage was simple. That gave Matra EUR 633,000 in cash, though it incurred a EUR 1.3m loss on the disposal. 

This leaves Matra with no debt, a 100% owned oil discovery, and at least 19  mmbbls of recoverable resources according to the independent review by Senergy which was based on a reinterpretation of the Archangelovskie data in early 2008. 

Unfortunately its next well, A-11, was unsuccessful. It was abandoned, with a EUR 2.7m write off. 

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