TIDMPTR
RNS Number : 8304V
Petroneft Resources PLC
09 November 2010
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PetroNeft Resources plc ("PetroNeft" or the "Company")
New Oil Field discovery at Arbuzovskaya
PetroNeft Resources plc (AIM: PTR), the owner and operator of Licences 61 and
67, Tomsk Oblast, Russian Federation, is pleased to announce the discovery of a
new oil field at Arbuzovskaya in Licence 61.
Highlights:
Arbuzovskaya No. 1 well discovers oil in main Upper Jurassic target
Approximately five metres of net oil pay in J1 interval
Open hole inflow test of 289 bopd (unstimulated)
Drilling continuing with secondary targets of Middle and Lower Jurassic
Arbuzovskaya No. 1 well
The Arbuzovskaya No. 1 well at the Arbuzovskaya (formerly Varyakhskaya) prospect
located 10 kilometres east of the Lineynoye oil field in Licence 61 was spudded
on 10 October 2010. The Upper Jurassic J1, oil reservoir horizon was intersected
at 2,566 metres measured depth. Logs indicate that the J1 interval consists of
19.0 metres of sandstone and shale. Approximately 5.0 metres of the upper most
part of this interval is considered to be continuous net pay with good reservoir
properties and oil saturation throughout. An open hole test was conducted over
this interval and tested at a pro-rated inflow of 289 bopd unstimulated. The oil
is high quality with an API gravity of 40 degrees which is consistent with other
fields in the Licence area.
The well will now be drilled to basement, at approximately 2,900 metres,
targeting higher risk secondary objectives in the Middle and Lower Jurassic
intervals. The well should be completed by the end of November at which stage
the Company will update shareholders with the final results of the well as part
of the operations update due around that time. This discovery well adds a fifth
oil field to the northern group of fields and will be included in Phase 2 of the
development.
Arbuzovskaya is the first well of a five well exploration programme designed to
potentially double the Company's 2P reserve base within the next 12 months.
Dennis Francis, Chief Executive Officer of PetroNeft Resources plc commented:
"We are delighted to commence our new exploration campaign with the discovery of
a fifth oil field at Licence 61. This is an especially important discovery,
because of the good flow rate it confirms the wider prospectivity of a number of
additional structures east of the existing producing Lineynoye oil field which
can be easily tied in to the central processing facilities and pipeline at
Lineynoye."
For further information, contact:
+-------------------------------------------------+------------------+
| Dennis Francis, CEO, PetroNeft Resources plc | +1 713 988 2500 |
| | |
+-------------------------------------------------+------------------+
| Paul Dowling, CFO, PetroNeft Resources plc | +353 1 443 3720 |
| | |
+-------------------------------------------------+------------------+
| John Frain/Brian Garrahy, Davy (NOMAD and Joint | +353 1 679 6363 |
| Broker) | |
| | |
+-------------------------------------------------+------------------+
| Charles Berkeley/Henry Fitzgerald-O'Connor, | +44 207 0506500 |
| Canaccord Genuity (Joint Broker) | |
| | |
+-------------------------------------------------+------------------+
| Martin Jackson/Kate Lehane, Citigate Dewe | +44 207 6389571 |
| Rogerson | |
+-------------------------------------------------+------------------+
| Joe Murray/Ed Micheau, Murray Consultants | +353 1 498 0300 |
+-------------------------------------------------+------------------+
The information contained in this announcement has been reviewed and verified by
Mr. Dennis Francis, Director and Chief Executive Officer of PetroNeft, for the
purposes of the Guidance Note for Mining, Oil and Gas Companies issued by the
London Stock Exchange in March 2006. Mr. Francis holds a B.S. Degree in
Geophysical Engineering and a M.S. Degree in Geology from the Colorado School of
Mines. He has also graduated from the Harvard University Program for Management
Development. He is a member of the American Association of Petroleum Geologists
and the Society of Exploration Geophysicists. He has over 35 years experience
in oil and gas exploration and development.
Forward Looking Statements
This announcement contains forward-looking statements. These statements relate
to the Company's future prospects, developments and business strategies.
Forward-looking statements are identified by their use of terms and phrases such
as 'believe', 'could', 'envisage', 'potential', 'estimate', 'expect', 'may',
'will' or the negative of those, variations or comparable expressions, including
references to assumptions.
The forward-looking statements in this announcement are based on current
expectations and are subject to risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by those
statements. These forward-looking statements speak only as at the date of this
announcement. No statement in this announcement is intended to constitute a
profit forecast or profit estimate for any period.
Glossary
+------+-----------------------------------------------------+
| 1P | Proved reserves according to SPE/PRMS standards |
+------+-----------------------------------------------------+
| 2P | Proved and probable reserves according to SPE/PRMS |
| | standards |
+------+-----------------------------------------------------+
| 3P | Proved and probable and possible reserves according |
| | to SPE/PRMS standards |
+------+-----------------------------------------------------+
| bopd | Barrels of oil per day |
+------+-----------------------------------------------------+
| C1 | Proved resources according to Russian standards |
+------+-----------------------------------------------------+
| C2 | Probable resources according to Russian standards |
+------+-----------------------------------------------------+
| C3 | Possible resources according to Russian standards |
+------+-----------------------------------------------------+
| km | Kilometres |
+------+-----------------------------------------------------+
| mmbo | Million barrels of oil |
+------+-----------------------------------------------------+
| P3 | Possible reserves according to SPE/PRMS standards |
+------+-----------------------------------------------------+
Notes to Editors
PetroNeft Resources plc was established in 2005 to develop oil and gas assets in
Russia and the Former Soviet Union and was admitted to the London AIM and Dublin
ESM Markets on 27th September 2006.
The main asset of the Company is a 100% interest in Licence 61, a 4,991 sq km
oil and gas licence in the Tomsk Oblast in Russia, held through its wholly owned
Russian subsidiary, Stimul-T. The Licence is located in the prolific Western
Siberian Oil and Gas Basin and contains four known oil fields, Lineynoye,
Tungolskoye, West Lineynoye and Kondrashevskoye, and over 25 exploration
Prospects and Leads. In December 2009 the Company announced the acquisition of a
second oil and gas licence in the Tomsk Oblast in Russia, Licence 67
([containing C3 Reserves of 55 mmbls]).
The Board and Management of PetroNeft is made up of highly experienced
professionals, including former Marathon Oil Company executives, in the
International and Russian Oil Exploration and Development business. The Russian
Management team also has extensive local knowledge and experience in the
exploration and development of oil and gas fields in the Tomsk Oblast.
Since acquiring Licence 61 in May 2005, the Company has carried out extensive
reprocessing and reinterpretation, using modern technology, of over 2,500 line
kms of vintage seismic acquired in Soviet times. It has also digitised and
reinterpreted the logs of 14 wells drilled on the Licence since 1972. PetroNeft
also has acquired over 1,000 line kms of new CDP-2D infill seismic and drilled
six new exploration/delineation wells. This new seismic and six well drilling
programme fully satisfied the exploration work obligation for the full 25 year
licence term.
Reserve estimates on Licence 61 prepared by Ryder Scott as of 1 January 2010
were:
+----------------------------+------+-------------------------+
| Proved reserves | (1P) | 10.4 million bbls |
+----------------------------+------+-------------------------+
| Proved and probable | (2P) | 70.8 million bbls |
| reserves | | (P1+P2) |
+----------------------------+------+-------------------------+
| Proved, probable and | (3P) | 531.3 million bbls |
| possible reserves | | (P1+P2+P3) |
+----------------------------+------+-------------------------+
In August 2009 PetroNeft announced a crude oil transportation agreement with
Nord Imperial, effective for 25 years, which significantly reduces the various
permits and associated approvals required for pipeline construction as well as
the costs. The new route, from Lineynoye to Kiev-Eganskoye runs adjacent to the
Tungolskoye and Kondrashevskoye oil fields and will create useful synergies for
future development phases.
On 21 September 2009 PetroNeft announced a US$27 million fund raising from
international institutional investors which fully funds the Phase 1 Development
Plan for the Lineynoye and West Lineynoye Fields.
On 28 May 2010, PetroNeft announced a US$30 million debt facility with Macquarie
Bank.
In August 2010, following the completion of a 60 km pipeline and of the
construction of oil storage and processing facilities, PetroNeft announced the
commencement of year-round oil production from the Lineynoye oil field, with the
Company expecting production of 4,000 bopd by the end of 2010. Production from
the Phase 1 project is expected to peak at around 12,000 bopd in 2012.
In October 2010 PetroNeft announced a $43 million fund raising from
international institutional investors which fully funds a five well exploration
programme for 2010/11 and will assist the Company with business development
opportunities.
This information is provided by RNS
The company news service from the London Stock Exchange
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