PTR.L Regulatory News (PTR)

PetroNeft Resources plc

27th April 2020

PetroNeft Resources plc ('PetroNeft' or 'the Company')

Operational Update

PetroNeft (AIM: PTR) an oil & gas exploration and production company, operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67 is pleased to provide an update on the progress of the re-entry of the C-3 well on the Cheremshanskoye field in Licence 67.

Highlights

· Successful re-entry of the C-3 well in the Lower Jurassic J14 interval in the C-3 well. Testing confirmed gas, and non-commercial quantities of high paraffin condensate/light oil.

· Work over of the J14 interval was under budget.

· Testing of the upper horizons and the well re-entry program as a whole has been suspended due to the current global situation.

Operations Update

Licence 67 

The C-3 well is located on the southern part of the Cheremshanskoye field and was originally drilled in 2011 and tested the J1-1, J1-3 and J14 clastic horizons recovering hydrocarbons from all three zones.

The well was successfully re-entered and re-perforated in the interval 2,990 to 3,006 m and then an ESP was run into the well on 29th of March. The aim of the re-entry of the J14 interval was to maximize the drawdown of the interval and induce natural flow to surface at commercial rates. The well was tested at various choke sizes, but stabilized flow could not be established due to the waxy oil/condensate and tight formation.

In total 202 barrels of fluid was produced during the tests with the highest recovery rate being 46 barrels on the 6th April.

Following completion of the test and evaluation of the results, we now interpret the J14 in the C-3 well to be a condensate rich gas cap. We are now studying all the information gathered to decide on the next steps. In the C-1 well (500m to the north west), there is a J14 basal sand with much better reservoir quality that could be the downdip oil leg of the gas cap encountered in the C-3 well.

On completion of the J14 test, the company managed to negotiate a low rate for the work over rig to stay on location in a standby mode so that we may return quickly without incurring demobilisation and remobilisation charges. We are now looking at moving up the well to re test the J1-1 and J1-3 which we believe will be able to produce commercial quantities of oil using an ESP. We do not believe the result on this test has any implications for the upper zones.

David Sturt, Chief Executive Officer of PetroNeft Resources plc, commented: 

"Whilst we are disappointed that we did not flow hydrocarbons at commercial rates, we are pleased that we managed to establish that the J14 interval is a liquids rich gas filled reservoir.

Initially we had planned to progress up the well to test the Upper Jurassic J1-1 and J1-3 intervals to establish commercial production before moving on to test the L-2 and L-2a well on the Ledovoye field. However, in light of the current economic situation combined with the coronavirus shut downs in Russia, we believe it is prudent to suspend operations for now."

For further information, contact:

The information contained in this announcement has been reviewed and verified by Mr. David Sturt, Chief Executive Officer and Executive Director of PetroNeft, for the purposes of the Guidance Note for Mining and Oil & Gas Companies issued by the London Stock Exchange in June 2009. Mr. Sturt holds a B.Sc. Degree in Earth Sciences from Kingston University and an MSc. in Exploration Geophysics from The University of Leeds. He is a member of the Petroleum Exploration Society Great Britain and has over 35 years' experience in oil and gas exploration and development.

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