PTR.L Regulatory News (PTR)

20 Sep 2007 07:01

Petroneft Resources PLC20 September 2007 20 September 2007 PetroNeft Resources plc Operational Update PetroNeft Resources plc ('PetroNeft' or 'the Company'), 100% owner of Stimul-T,the sole owner and operator of Licence 61, Tomsk Oblast, Russian Federation ispleased to provide this update on the progress on its 2006/07 three welldrilling programme. Highlights • Positive inflow testing of Lineynoye No. 7 - 125 bopd unstimulated • High quality oil - 44 degrees API • Planned winter pilot/long term production test of both Lineynoye No. 6 and No. 7 • Tungolskoye No. 4 is being sidetracked to fully assess reservoir • Full reserves review to be carried out in November 2007 by Ryder Scott Lineynoye No. 7 Well Initial analysis of the Lineynoye No. 7 exploration well on the West LineynoyeProspect, released on 14 August, confirmed the presence of 2 metres of nethydrocarbons in the Upper Jurassic J1 sandstone interval. It also confirmed aGross Oil Column of 22 meters. Flow testing ("Raising Head" methodology) of thewell has now been successfully completed over a 4 metre gross perforatedinterval (-2,502 to -2,506 metres measured depth). During testing, the wellflowed oil at rate of 125 barrels per day. The oil is very high quality with a44 degrees API gravity. This well will require an electrical submersible pump for commercial production.Initial conservative studies based on the pay zone properties and test resultsindicate that the well should flow at least 250 bopd with the proper electricalsubmersible pump. This level of unstimulated flow is excellent for the region,where tight reservoirs normally require reservoir Stimulation for production.Stimulation of the reservoir through hydraulic fracturing will further increasethis flow rate from the well. Studies are now underway to place the well (along with Lineynoye No. 6) on pilot/long term production test during the winter season of 2007/08. Tungolskoye No. 4 Sidetrack The Tungolskoye No. 4 appraisal well has 15 metres of net oil pay based on thecore data and independent log interpretations. This represents the bestreservoir interval encountered of the 17 wells drilled in the block to date.However, we are currently sidetracking the existing well in order to overcomemechanical difficulties and fully test the accumulation at this location. It isanticipated the well will be sidetracked and tested before the end of October. When all testing is completed a reassessment of the reserves in the establishedoil fields on Licence 61 will be carried out by outside consultants Ryder Scott.The results will be incorporated into the Plan of Development. Dennis Francis, Chief Executive Officer of PetroNeft Resources plc commented: "We are pleased to announce positive results for the Lineynoye No. 7 flowtesting. We are especially excited by the demonstrated flow rates and projectedrates on Artificial Lift without Stimulation. This provides positive resultsfor ongoing development planning. We are making progress across the full spectrum of our projects. The TungolskoyeNo. 4 sidetrack will give us necessary information for a full reassessment ofour reserves levels which will be carried out to both SPE and Russian standards/criteria. Along with our winter 2007/08 three well drilling programme, we willconduct two pilot/long term production tests and also plan to complete thefield development plan in the near future." For further information, contact: Dennis Francis, CEO, PetroNeft Resources plc (Houston)+1 713 988 2500 Desmond Burke, Director Investor Relations, PetroNeft Resources plc (Ireland)+353 52 53226 John Frain/Brian Garrahy, Davy+353 1 679 6363 Damien Mauvais, Natixis Bleichroeder+44 207 220 5184 Nick Elwes/Paddy Blewer, College Hill (UK)+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 Artificial Lift - Any system that adds energy to the fluid column in a wellborewith the objective of initiating and improving production from the well.Artificial-lift systems use a range of operating principles, including rodpumping, gas lift and electrical submersible pumps. Gross Oil Column - the total thickness of reservoir and non-reservoir rock abovea common oil water contact. Rising Head Test - Production flow test run in a well with low formationpressure. In this case the volume of fluid produced into the production stringis measured at various dynamic levels. This information provides the basis forestimating production capacities and future reservoir performance. In this casethe well tested 125 bopd at an average dynamic level of 1,527 metres. Stimulation - A treatment performed to restore or enhance the productivity of awell. Stimulation treatments fall into two main groups, hydraulic fracturingtreatments and matrix treatments. Fracturing treatments are performed above thefracture pressure of the reservoir formation and create a highly conductive flowpath between the reservoir and the wellbore. Matrix treatments are performedbelow the reservoir fracture pressure and generally are designed to restore thenatural permeability of the reservoir following damage to the near-wellborearea. 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. This information is provided by RNS The company news service from the London Stock Exchange