PetroNeft (AIM: PTR) an oil & gas exploration and production company, operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67 is pleased to provide the following update on the Licence 67 operational plan.
· Plan to bring Cheremshanskoye field in Licence 67 into production during Q1 2020.
· Exploring options to work over and re-test two wells in the Ledovoye field, also in Licence 67, during 2020.
Licence 67 Work Plan
As previously advised to shareholders, the Company has been examining development options for Licence 67. We are now pleased to announce that we will be re-entering the C4 and C3 wells on the Cheremshanskoye field during the first quarter of 2020 with the combined aim of bringing the field into production and at the same time providing crucial reservoir performance data. This will enable the Company to optimise forward development of the field which benefits from a favourable infrastructure location, allowing low cost operations. There is a road running along the eastern edge of the field, plus powerlines running close to the western margin of the field, which should allow us to reduce OPEX over the longer term.
In addition, the Company is also working on plans to re-enter two wells on the Ledovoye field, also in Licence 67, during 2020 and will be providing further updates on these plans shortly. Should this be successful the Company will be looking to both book additional reserves and promptly start production from the Ledovoye field. Like the Cheremshanskoye field, Ledovoye is ideally located close to existing infrastructure, being only 60m away from a major all-weather road.
David Sturt, the Company's Chief Executive Officer ("CEO") commented,
"This is an exciting development for the Company as we work towards commencing production from the Cheremshanskoye field in Licence 67. Re-entering the two previously drilled wells enables us to initiate production without the need for significant capital.
In addition, following the approval of the Cheremshanskoye field reserves from the State Reserves committee (GKZ) earlier this year, the field qualifies for a 20% lower production tax which significantly increases the value of each barrel of oil by approximately $4/bbl in today's oil price environment.
We have outlined a twin track strategy to develop shareholder value. These wells have the potential to both increase production and revenues while also booking further reserves and increasing the value of Licence 67."