LONDON (Alliance News) - Volga Gas PLC on Monday said it is drilling an exploration well in its Karpenskiy licence area in the Saratov region of southern Russia.
"This exploration well is part of a strategy to build on the company's potential oil resources and to diversify the sources of revenue and cash flow. While there is no current certainty of success, the cost of the drilling is modest and is funded from the company's operating cash flow," Andrey Zozulya, chief executive, said in a statement.
The well is being drilled on the Yuzhno Mironovskaya prospect on a structure that is expected to be prospective for oil, the company said.
Based on the company's own estimates, the target structure is considered to have the potential to contain up to 3 million tonnes of recoverable oil. That is equivalent to 22.0 million barrels of oil.
The well had reached a total vertical depth of approximately 700 metres as of Friday last week, according to Volga, which said the main exploration targets are at a depth of up to 1,000 metres.
Core samples are planned to be taken when the well has reached potential reservoir. Drilling operations are expected to be completed within two weeks.
Volga said the well could be capable of being developed rapidly and producing oil within a short timeframe, in the event of a discovery.
Results will be disclosed once drilling, coring and logging operations are complete, Volga said.
Shares in Volga Gas were untraded at 34.0 pence on Monday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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