VGAS.L Share News (VGAS)

The Russia based oil and gas exploration and production group Volgas gas has today provided an update on current activities. First of all, the acquisition of the Dobrinskoye gas field and plant was completed during April 2011 and began contributing to revenues as of 1 April 2011.Secondly, it points out, total production in May 2011 averaged 3,485 boepd, providing revenues of US$3.9m for the month. At its Uzenskoye field average production for the year to the 31 May 2011 was reduced to 1,109 bopd, due to weather conditions, whereas in May its average production reached 1,329 bopd. A new well, Uzen #11, is expected to be drilled and completed later in 2011 or early 2012.Thirdly, the company calls attention to the fact that test production continues at its Vostochny Makarovskoye field and that the wells are to be connected to the gas plant during the summer of 2011.Lastly, the outfit has indicated that at 31 May 2011 the Company had US$14.4m in cash and debt of US$9.0m. According to the firm's executives, "The inclusion of the Dobrinskoye field and the rising revenues from Uzenskoye oil sales has significantly increased the Group's net operating cash generation."As of 14:02PM shares of Volgas are rising by 2.6%, to 129.5p, in London trading. AB