(Alliance News) - Petroneft Resources PLC on Wednesday said it has commenced year-round production from the Sibkrayevskoye field at the 50%-owned Licence 61.
The Russia-focused oil and gas firm said production in the field has only occurred during the winter season during which it usually produces between 200 and 250 barrels of oil per day.
However, during the season, oil could only be trucked along ice roads to the central processing facility.
However, the completion of a 26-kilometre line from the Sibkrayevskoye field to the processing facility at Lineynoye allows for year-round production without the need for expensive trucking, the company said.
Petroneft said while the project was completed on schedule and "significantly" under budget - with the increased production and cash flow providing valuable long-term reservoir performance - it noted business may be hurt by the Covid-19 outbreak as well as turbulence in the energy sector caused by recent declines in the price of oil and the devaluation of the Russian rouble.
"The performance data from these two wells is going to provide vital reservoir data which will help to de-risk further capital allocation to this asset, especially now that we have an improved understanding of the geology of the field. This investment, combined with the recent successful re-entry of the c-4 well, demonstrates the company's ability to implement low cost but highly operationally effective solutions to the development and optimisation of its resource base, despite wider industry challenges," said Chief Executive David Sturt.
The stock was trading 24% higher at 0.65 pence each on Wednesday afternoon in London.
By Ife Taiwo; ifetaiwo@alliancenews.com
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