REG - Petroneft Resources - Reporting & Operations Update

Petroneft ResourcesAnnouncement

16/06/2022 07:00

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RNS Number : 0544P  Petroneft Resources PLC  16 June 2022

PetroNeft Resources plc

16(th) June 2022

 

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

 

Reporting & Operations Update

 

 

PetroNeft provides the following updates.

Highlights

 

·      The board of PetroNeft is saddened and deeply concerned by the
Russia-Ukraine conflict and hopes that a peaceful resolution will be found
soon. We  continue to monitor the situation on a daily basis, including
sanctions and any potential restrictions imposed, and will keep shareholders
updated as appropriate. We continue to operate within Government guidelines in
all markets in which we operate.

 

·      Licence 61

o  Reservoir stimulation program successfully completed on schedule, within
budget, with results as modelled, currently providing an incremental
production uplift of c. 200 bopd (gross)

o  Continue to focus on maximising export volumes.

 

·      Licence 67

o  C-4 well at the Cheremshanskoye field continues to exhibit sustained and
stable production.

o  Drilling preparations continue but at a reduced pace.

 

Extension for Financial Reporting Deadline

 

Due to the continued impact of Covid, the company has been granted an
extension of up to three months  for the reporting and filing of its
financial results for the year ended 31st December 2021, such that it will
publish these results as soon as possible, but by no later than 30th September
2022

.

 

Company Financial and  Operation  Metrics.

 

Whilst the ongoing geopolitical situation is causing disruptions, to date the
 financial  and operational  performance of the Company's assets and
business remain broadly in line with expectations.

 

Key Financial Metrics

 

                                                                 31 May 2022  31 Dec 2021  31 Dec 2020
                                                                 USD          USD          USD
                                                                 Un-Audited   Un-Audited   Audited

 Cash and Cash Equivalents -PetroNeft                            221,706      739,781      101,028
 Cash and Cash Equivalents -WorldAce Investments Ltd*            3,088,343    185,274      212,437

 Interest bearing Loans and Borrowings-PetroNeft                 5,227,000    6,516,484    4,151,391

 * WorldAce Investment Limited is PetroNeft's 50/50 Joint Venture, with Oil
 India International B.V.

 

Key Operational Metrics

 

 Production - Barrels (gross)

 Licence          To 31 May 2022   To 31 May 2021  Percentage change  FY 2021 Gross production  FY 2020 Gross production  Percentage change
                  Un-Audited       Audited                            Un-Audited                Audited
 61               250,383          264,744         -5%                603,655                   570,510                   6%
 67               35,328           27,177          30%                89,014                    1,200                     7,318%
 Total            285,710          291,921         -2%                692,669                   571,710                   21%

 Average USD Price per Barrel

 Licence          To 31 May 2022   To 31 May 2021  Percentage change  FY 2021                   FY 2020                   Percentage change
                  Un-Audited       Audited                            Un-Audited                Audited
 61               $74.0            $43.5           70%                $50.9                     $28.2                     80%
 67               $62.8            $42.8           47%                $52.1                     $31.2                     67%

 

Licence 61

 

Current production is +/- 2,000 bopd (gross), with the Lineynoye field
producing about 1,000 bopd, and Arbuzovskoye and Sibkrayevskoye fields each
producing about 500 bopd. We are working to maximise export volumes which
allow for larger net margins, due to lower domestic demand and prices.

 

A six well reservoir stimulation campaign was completed safely on schedule and
within budget. The program was focused mainly on the Lineynoye field where a
total of five wells were fracced. Post frac incremental production is
currently approximately  200 bopd, which represents a circa  35% uplift.
Three out of the five wells fracced (L-112, L-114 and L-116) experienced
significant increases in production, exceeding expectations.

 

We had planned to stimulate six wells in total on the Lineynoye field;
however, when the work-over crew commenced preparing the L-7 well, it was
decided for operational reasons to avoid risking capital and spending undue
time rectifying the well-bore conditions for stimulation. The well was
re-perforated instead and is now producing at  stable flow rates.

 

The sixth well to be stimulated on Licence 61 was the A-1 well at the
Arbuzovskoye field. This well had been shut in at the end of 2020 due to near
well bore reservoir damage. The well had been re-perforated multiple times
without much success; and the only remaining operational option was to try and
stimulate the well to see if it could be brought back into commercial
production. Since this operation the well has been producing at low rates post
stimulation (approx 10 bopd). We intend to monitor the well closely before
making a decision later in the year on our forward plans.

 

In addition to the above campaign, the Tungolskoye T-501 well was perforated
in the horizontal interval 3730 - 3780m in an attempt to try and establish
commercial production from the J1-2 interval.  Post perforation, an
Electrical Submersive Pump (ESP) was run and oil rates of 20 to 40 bopd were
observed with high water cuts.  In total 384 barrels of oil were recovered.
Unfortunately, those oil rates are not economically viable so we have decided
to shut the field in again whilst we evaluate additional data.

 

 

 

 

Licence 67

 

The Cheremshanskoye field continues to produce through the C-4 well at +/-265
bopd with no water and no significant decline. The well has already produced
in excess of 120,000 barrels of oil. In addition to providing a consistent
revenue stream, the stable and robust producton history is providing valuable
reservoir performance data, confiming our view of the significant potential of
this field.

 

Preparations for the Cheremshanskoye development drilling program are ongoing,
but at a more cautious rate due to the ongoing external environment.

 

For further information, contact:

 David Sturt, CEO, PetroNeft Resources plc                                +44 7903 869 608
 Brian Garrahy/Ciara O'Mongain, Davy (NOMAD, Euronext Growth Adviser and  +353 1 679 6363
 Broker)
 Paul O' Kane - Murray Consultants                                        +353 1 498 0300

 

 

 

 

 

 

 

 

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