PTR.L Regulatory News (PTR)

24 Apr 2007 08:29

Petroneft Resources PLC24 April 2007 PetroNeft Resources plc Drilling Update PetroNeft Resources plc ('PetroNeft' or 'the Company'), owner and operator ofLicence 61, Tomsk Oblast, Russian Federation, through wholly owned Russiansubsidiary Stimul-T, is pleased to announce the initial results of the firstmodern delineation well at the Lineynoye Oil Field in Western Siberia andprogress on two further wells on the Licence. Lineynoye No.6 well The Lineynoye Oil Field is located in Licence 61 in the Tomsk Region of theprolific Western Siberian Oil and Gas Basin. Discovered in the 1972, Ryder Scottpetroleum consultants estimate 2P reserves of 15.6 million bbls of oil.PetroNeft's operational strategy is to utilise modern technology and techniquesto fully delineate the field, confirm reservoir details, and optimise a fielddevelopment plan as a first step towards production. Today's news is the first operational update post the first well spud in March2007 and whilst very positive, should be seen as a successful step in a processwhich will eventually lead to production. • The Lineynoye No. 6 well spudded on 4 March 2007 and has been drilled to a Target Depth of -2,650 metres subsea. • Oil was confirmed within the J1 reservoir interval in 2 stratigraphic units, J11 and J12. • The J1 oil reservoir interval and lowermost part of the Bazhenov Formation were cored from, -2,401.3 meters to -2,436.1 metres subsea, with 98.9% core recovery. These cores are currently being analysed in detail. • The primary hydrocarbon interval, the J12 sandstone, from -2,419.3 metres to -2,430.5 metres subsea, contains 11.2 meters of continuous net pay with 14% to 16% porosity and hydrocarbon saturations of 75% to 84%. • The secondary hydrocarbon interval the J11 sandstone is 2 metres thick with hydrocarbon shows but appears tight and non-productive at this location based on the initial log evaluation. • There is excellent stratigraphic correlation between the reservoir intervals in L-6 and discovery well L-1, which was drilled in 1972. • The base of the Bazhenov Formation is at -2,410.3 metres subsea in the well, which is consistent with the seismic interpretation prior to drilling the well. (the well intercept is 190 metres southwest of the surface location) • The data indicates that the oil water contact is at or below -2,430.5 metres subsea in the lower part of the J12 sandstone, which is at least 10 meters lower than the previous conditional oil water contact for the field. • Geophysical logging and initial petrophysical analysis has now been completed and preparations are underway to carry out flow tests on the well to determine its productive capacity. Results will be published as soon as they are available. Other Activities The Tungolskoye No. 4 drilling rig has now been assembled and final hook-up isunderway. It is anticipated that this well will be spudded by mid May. Thiswell is designed to confirm the reservoir data of the 1973 discovery and providefurther input into a Final Development Feasibility Study, expected to becompleted in the 3rd/4th quarter of 2007. Ryder Scott petroleum consultantsestimate 2P reserves of 17.9 million bbls of oil for the Tungolskoye Oil Field. The Lineynoye No. 7 site has required additional piles to be driven to firm upthe foundation for the drilling rig and it is anticipated that this high impactexploration well will now spud in June. The drilling results from this well and the Tungolskoye No. 4 and Lineynoye No.7 wells will be used to update the Feasibility Study for the Development of theLineynoye and Tungolskoye fields, which is expected to be completed later in2007. The Company will also use data gained from this season's drilling andseismic programme to further evaluate the numerous prospects on License 61.There are several exploration and development prospects currently under fullstudy which will develop into a drilling programme for the winter of 2007/2008. Dennis Francis, Chief Executive Officer of PetroNeft Resources plc commented: 'We are delighted with the initial results of the Lineynoye No. 6 well. Notonly have we confirmed the presence of significant and continuous reservoirsandstones in the J12 interval, but we have also lowered the oil water contactfor the field which, when integrated with the new seismic data acquired thiswinter, could increase the size of the field both geographically and in terms ofreserves. We now look forward to the flow test results from Lineynoye No. 6 and thedrilling of the remaining two wells in this years evaluation programme.' For further information, contact: Dennis Francis, CEO, PetroNeft Resources plc+1 713 988 2500 Desmond Burke, Director Investor Relations, PetroNeft Resources plc+353 52 53226 John Frain/Brian Garrahy, Davy+353 1 679 6363 Nick Elwes/Paddy Blewer, College Hill+44 207 457 2020 The information contained in this announcement has been reviewed and verified byMr. Dennis Francis, Director and Chief Executive Officer of PetroNeft, for thepurposes of the Guidance Note for Mining, Oil and Gas Companies issued by theLondon Stock Exchange in March 2006. Mr. Francis holds a B.S. Degree inGeophysical Engineering and a M.S. Degree in Geology from the Colorado School ofMines. He has also graduated from the Harvard University Program for ManagementDevelopment. He is a member of the American Association of Petroleum Geologistsand the Society of Exploration Geophysicists. He has over 34 years experiencein oil and gas exploration and development. Glossary of Key Technical Terms Bazhenov Formation - Organic rich shale of Upper Jurassic age that is both amajor source rock for oil and cap rock in the West Siberia Oil and Gas Basin.The base of the formation is a continuous and reliable seismic marker throughoutthe basin. J11 and J12 Sandstones - Stratigraphic units in the top part of the VasyuganFormation of Upper Jurassic age in the West Siberian Basin. The VasuganFormation underlies the Bazhenov Formation and the J11 and J12 sandstones arenormally of reservoir quality in the region with sufficient porosity andpermeability to store and transmit hydrocarbons. Stratigraphic - refers to the sequence arrangement of layered (stratified) rocksbased on the law of superposition, which states that in a normal sequence ofrock layers the youngest is on top and the oldest on the bottom. Stratigraphiccorrelation is the correlation of stratified rocks between locations based ofthe characteristics of the layers. Oil Water Contact - A bounding surface in a reservoir above which predominatelyoil occurs and below which predominately water occurs. Forward Looking Statements This announcement contains forward-looking statements. These statements relateto the Company's future prospects, developments and business strategies.Forward-looking statements are identified by their use of terms and phrases suchas "believe", "could", "envisage", "potential" "estimate", "expect", "may", "will" or the negative of those, variations or comparable expressions, includingreferences to assumptions. The forward-looking statements in this announcement are based on currentexpectations and are subject to risks and uncertainties that could cause actualresults to differ materially from those expressed or implied by thosestatements. These forward-looking statements speak only as at the date of thisannouncement. End This information is provided by RNS The company news service from the London Stock Exchange