PTR.L Regulatory News (PTR)

5 Mar 2007 07:04

Petroneft Resources PLC05 March 2007 PetroNeft Resources plc Operational Update Highlights; • Drilling has commenced on the No. 6 delineation well in the Lineynoye Oil Field. • Preparations for drilling the Tungolskoye No. 4 delineation well are underway. • A third rig will be used for high impact exploration well, Lineynoye No. 7, to ensure completion of 2006/07 Drilling Programme. • Seismic Data Acquisition of 540 line kms of CDP 2D seismic in final stages. • Preliminary Development Feasibility Study on the Lineynoye and Tungolskoye Oil Fields completed. PetroNeft Resources plc ('PetroNeft' or 'the Company'), owner and operator ofLicence 61, Tomsk Oblast, Russian Federation is pleased to provide this updateon the progress on its 2006/07 three well drilling and seismic programmes. PetroNeft is pleased to announce that drilling has commenced on the No. 6 wellin the Lineynoye Oil Field. Due to unusually warm weather conditions in WesternSiberia, there has been some delay in getting all necessary equipment to thedrill sites on the Lineynoye and Tungolskoye Oil Fields on Licence 61. As aresult, there has been some slippage in the planned time frame of commencementof drilling. However, this is not expected to have any significant impact onthe cost of the wells, the timing of final results or the full completion of thethree well drilling programme as planned for 2007. To ensure that all wells arecompleted as planned, a third rig is being mobilised to drill the Lineynoye No.7 well. The 2006/2007 Winter seismic programme is proceeding on schedule, with 450 kms,of a total of 540 kms, already acquired. The programme is expected to becompleted in mid March. Lineynoye and Tungolskoye Drilling Programme The Lineynoye and Tungolskoye Oil Fields were originally found by a SovietExploration Company in the early 1970s. Independent Petroleum Consultants,Ryder Scott Company, have calculated the Proved and Probable Reserves of the twofields to be 33.5 million barrels of oil. The two planned delineation wells,Lineynoye No. 6 and Tungolskoye No. 4, are designed to confirm the reservoirdata of the 1970s discovery wells and provide further input into a FinalDevelopment Feasibility Study, expected to be completed in the 3rd/4th quarterof 2007. The results of the high value exploration well, Lineynoye No. 7, willalso provide input into the Final Development Feasibility Study. Lineynoye No. 6 Well The Lineynoye No. 6 well on Licence 61 was spudded on March 4th 2007. Theprincipal target horizons for this well are Upper Jurassic sandstone reservoirs,at a depth of 2,390 metres. The total planned depth for the well isapproximately 2,750 metres and it is anticipated that the well will be drilled,logged and tested within approximately 70 days of commencement. Tungolskoye No. 4 Well Site preparation and mobilisation of a second drilling rig to the TungolskoyeOil Field has been completed and assembly of the rig is underway. Drilling isexpected to commence on Tungolskoye No.4 well in late March/ early April. Theprincipal target horizons for this well are again the Upper Jurassic sandstonereservoirs, at a depth of 2,490 metres. The total planned depth for the well isapproximately 3,100 metres and it is anticipated that the well will also bedrilled, logged and tested within approximately 70 days of commencement. Lineynoye West Prospect. Lineynoye No. 7 Well West Lineynoye, a high impact prospect, is estimated by Ryder Scott to containPossible Reserves of approximately 67 million barrels of oil. In order tocomplete the scheduled drilling of this target during the currrent drillingseason, a third rig has now been mobilised to the site and is expected tocommence drilling in May. Drilling pad preparation is underway on the site. Theprincipal target horizons for this well are again the Upper Jurassic sandstonereservoirs, at a depth of 2,375 metres. The total planned depth for the well isapproximately 2,750 metres and it is anticipated that the well will also bedrilled, logged and tested within approximately 70 days of commencement. Seismic Programme The 2007/2008 winter seismic programme, to acquire an additional 540 kms of highresolution 2D seismic data, is proceeding as planned. Approximately 450 kms ofdata has been acquired to date and it is currently expected that thisacquisition will be completed by mid March. This programme is designed toupgrade the definition of known prospects on the licence. The results will beused in designing the 2007/2008 Winter drilling programme and will also be usedin the Final Development Feasibility Study. Development Feasibility Study A Preliminary Feasibility Study for the development of the Lineynoye andTungolskoye Oil Filelds has now been completed by a Russian Institution. Thepurpose of the Study is to evaluate the oil reserves and the economics of theoil fields and will be used as part of the approval process required fordevelopment in the Tomsk Oblast and the Russian Federation. As stated above, theresults of all three wells and some of the current seismic acquisition, will beincorporated into a Final Feasibility Study, which will be used for finalapproval of the project and for development financing purposes. Dennis Francis, Chief Executive Officer of PetroNeft Resources plc commented: 'We are delighted, given delays created by the unusually warm weather in Siberiathis winter, to have our three well drilling programme back on schedule.Bringing in the third drilling rig should allow us to complete of our plannedprogramme on schedule with no significant increase in cost We remain excited about the prospects on License 61. The two wells at Lineynoyeand Tungolskoye are designed to firm up our reserves base and help prove theproduction viability of these fields; whilst West Lineynoye is a high impactexploration well that could seriously change our reserves base. We look forward to updating the market on the results of these wells and howthey fit into our overall objective - exploiting Licence 61 as an oil producingcore area" 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. 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