REG - Petroneft Resources - Operational and Finance Update

Petroneft ResourcesAnnouncement

13/01/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220113:nRSM2708Ya&default-theme=true

RNS Number : 2708Y  Petroneft Resources PLC  13 January 2022

PetroNeft Resources plc

13(th) January 2022

 

PetroNeft Resources plc ('PetroNeft' or 'the Company')

 

 

Operational and Finance Update

 

PetroNeft (AIM: PTR) an oil & gas exploration and production company,
operating in the Tomsk Oblast, Russian Federation; and 90% owner and operator
of Licences 67 and 50% owner and operator of Licence 61 provides the following
update.

 

Highlights

·    Reservoir Stimulation program on the Lineynoye and Arbuzovskoye
fields (Licence 61) expanded from five to seven wells.

 

·    Drilling tender for Cheremshanskoye field drilling (Licence 67) of up
to five new wells awarded to OJSC SSK ('SSK').

 

·    Oil sales and forward finance contract for Cheremshanskoye production
extended for an additional year.

 

 

Licence 61

On the 12(th) of November 2021, the Company announced it had signed a contract
with NewTech Well Services LLC ('NewTech') for a five well reservoir
stimulation program to be carried out during Q1 2022.

 

After further technical analysis and discussions with NewTech, we are pleased
to announce that the program has been expanded from five to seven wells, of
which six will be on the Lineynoye field and one on the Arbuzovskoye field.
The two additional wells added to the program are the two best producing wells
at the Lineynoye field.

 

The expected increase in overall production from the seven well program is
between 350 and 650 bopd. The successful reservoir stimulation  of L-115 well
(Lineynoye field) last year, and outstanding results from the S-373 well
(Sibkrayevskoye field), provided crucial technical information which has
enabled us to expand the program with confidence.

 

 

Licence 67

The Company has completed a tender for the provision of drilling services at
the Cheremshanskoye field. The tender is now closed and awarded to SSK. The
program covered by the tender is for the drilling of up to five wells which
will be a combination of vertical and horizontal development wells from the
northern pad on the Cheremshanskoye field, adjacent to the currently producing
C-4 well.

 

 

SSK have considerable experience of drilling operations in the Tomsk region
including the successful drilling of the C-4 well in 2018. As well as
providing the most commercially attractive bid, they were also selected for
their technical and operational excellence. Now that the tender process is
complete, we are negotiating and finalising the drilling contract.

 

 

In December 2020, an Offtake Contract was signed with the Alexandrovskoye
Refinery ('AOR') for the purchase of oil produced from the Cheremshanskoye
field (C-4 well).  This was a very positive development for PetroNeft,
providing competitive pricing at the wellhead, thereby maximising returns on
production. The contract was for an initial 12 month period which has now been
extended for a further year.

 

The original contract included a forward financing provision for up to $1M to
cover the costs of constructing the 6.2 km all-season road, linking the C-4
well in the west to the all-season road running close to the eastern margin of
the field. This financing option was not used due to the strong performance
from the C-4 well, enabling the road to be paid for out of free cash flow.
Whilst the road is now complete, the forward financing option has been
retained within the contract extension, further enhancing our financial
flexibility as we plan for expanded operations in the year ahead.

 

David Sturt, CEO PetroNeft commented:

 

"We are very pleased to continue to report operational progress across our
producing portfolio. At Licence 61 thanks to the excellent technical work by
our team in Tomsk, combined with the strong performance from the two wells
stimulated in 2021, we have been able to expand our reservoir stimulation
program to seven wells - a significant increase on last year's two-well
program. If successful, this has the potential to result in a significant
increase in production and therefore to deliver meaningful returns to the
business.

At the Cheremshanskoye field, we are delighted to be working with an
experienced drilling contractor with successful experience of both working in
Tomsk and with PTR. The tender process has also demonstrated the benefit of
having all season access to the field enabling us to optimize the timing for
operational activities without the normal seasonal constraints so common
within this region which has led to more competitive pricing

We look forward to keeping shareholders informed as our operational program
ramps up through the year"

 

For further information, contact:

 David Sturt, CEO, PetroNeft Resources plc                            +44 7903 869 608
 John Frain / Ciara O'Mongain (NOMAD and Broker)                      +353 1 679 6363
 Joe Heron / Douglas Keatinge, Murray Consultants                     +353 1 498 0300

 

 

The information contained in this announcement has been reviewed and verified
by Mr. David Sturt, Chief Executive Officer and Executive Director of
PetroNeft, for the purposes of the Guidance Note for Mining and Oil & Gas
Companies issued by the London Stock Exchange in June 2009. Mr. Sturt holds a
B.Sc. Degree in Earth Sciences from Kingston University and an MSc. in
Exploration Geophysics from The University of Leeds. He is a member of the
Petroleum Exploration Society Great Britain and has over 35 years' experience
in oil and gas exploration and development.

 

 

 

Glossary

 bopd  Barrels of oil per day

 

 

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDEAXFAFAPAEFA