Petroneft Resources Plc - Now Looking an attractive Investment ?
Sunday, Jan 27 2013
Petroneft have had mixed fortunes over the last few years but there are signs that the company are back on track and are now trading at attractive multiples to new investors. 2012 proved to be a good year for the company in terms of putting the groundwork in on its key assets in Siberia and are now steadily stepping out production, which was stated in the last company update on the 18th december 2012 as being 2800 Bopd * .
Petronefts key assets are located in the Russian state of Siberia and comprise of Licence 61 and Licence 67 both of which have large booked reserves,and also hefty contingent resources which the company are starting to exploit.Internal company estimates suggest that each of their operated fields could contain many many multiples of the current booked reserves data. Petroneft also have an advantage in terms as operator and enjoy a relative low cost per well development platform.
The key factor that makes Petroneft an attractive investment right now is the company,s ability to self fund its own development plans whilst also paying down its modest debt position.Alongside an anticipated major reserves upgrade once the next few wells have been put on production.
The company are currently drilling / testing Well No 112 at its Arbuzovskoye field, following on from a solid run of successes on the acreage where production output has been steadily growing. Results are now due from Well 112 which is located on the highest flow eastern side of field alongside news of the three producing wells taken offline at the end of last year for remedial work on pumps, and are due back online before the end of january.
Well 112 is the fifth development well on the field with a further five wells planned and funded for through 2013,and the company are targetting a steady daily ouput of 5000 barrels or more during the course of the next 12 - 16 months.
RNS - 18 December 2012
Dennis Francis, Chief Executive Officer of PetroNeft Resources plc, commented:
"We are pleased with the initial flow rate on well 111 and the fact that there is no water production associated with the well. We continue to expand our understanding of the field and are now drilling well 112 on the eastern side of the field where we have seen the highest flow rates to date. The operational challenges and variation in results are as expected. We look forward to completing further wells in Arbuzovskoye over the coming months as we continue to focus on materially increasing our production profile and cash flows."
There has been very mild relative weather in eastern siberia for best part of the last 6 weeks so my guess is they have been very busy on the ground with the current drill at well 112 and the three well repairs.
Expect an RNS this week guys and a nice bounce in the SP
right again, people mis-read the prior RNS, some very much on purpose. Wait in various stages. Wait for another stage, especially after the May/ June melt waters are ebbing in the River Ob region. Wait for the costly heli-fracing of previous years to be completly history, which was a desparate measure Wait...... as the famous Russian poems of WWII goes.. Let the 2nd pipleline, not vehicles take-over...wait for these operational cost reductions; yes we are three years behind plan, but 2013 is PTR year Just because oliers work during Alaskian Winters ,does not mean Russians down tools in the Winter within the Tiaga and Tundra. The Russians understand the winter.... gla to all genuine ones - RM
Update reports 150 b/d from latest well on Arbuzovskoye Field -18 December 2012
FACTS: Petroneft has reported that well 111, completed on the Arbuzovskoye field in Licence 61, has flowed with an initial production rate of 150 b/d with no water production. Well 112, the fifth development well on the field, has commenced. Total production from the licence is now 2,800 b/d. The operations are located in the Tomsk region in western Siberia.
ANALYSIS: The flow rate from well 111 is comfortably within the level required to meet the production targets set by the Group. Field production rates of 2,800 b/d do not include three wells on the Linenoye Field which are currently offline. Bringing these wells back on line was planned to be achieved before the year-end, but particularly inclement weather has held back workovers and pump replacement. These three wells are likely to account for in the order of 150 b/d of production, suggesting that Licence 61 capacity is now close to 3,000 b/d. The reported level of 2,800 b/d compares to 2,500 b/d output in late November, the last update.
The next well in the programme is now underway. Well 112 is located in the productive eastern part of the field (between wells 101 and 102) and will be the fifth development well on the field.
DAVY VIEW: Today's news is positive for Petroneft. Following the recent funding, the group’s priority is now to steadily build out production. This funding allowed material inroads into group debt to be made ($7.5m was repaid) and put in a re-scheduled repayment plan. So far, the combined well results are in line with requirements and expectations to meet this programme. More generally, the build out of production indicates that the underlying business plan for Petroneft's Licence 61 is back on track. We value the group at 23p per share.
after over 4m in buys to 800k in sells its strange we didnt finish at least a little up. Not sure what to make of it, but it does feel like something is going to happen here soon. Il stick with the chap putting in 1/4 million for now, might know something we dont
I've been saying for a couple of weeks that there's something happening in the background thats a bit fishy. I think the only reason that this hasn't moved is the bad PR in the past, alot of people still suspicious. We will see. GLA
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