PTR.L Regulatory News (PTR)

11 Jul 2007 07:00

Petroneft Resources PLC11 July 2007 NOT FOR RELEASE, PUBLICATION or DISTRIBUTION IN OR INTO THE UNITED STATES,CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN. PetroNeft Resources plc ("PetroNeft" or the "Company") US$15.26 million Placing - US$15.26 million fund raising from international institutional investors - Funds will be used to finance 2007/08 operational programme which will include: o Two new low risk exploration wells in the Tungolskoye - Lineynoye oil productive fairway targeting 53 million barrels of Possible Reserves. o One delineation well on the West Lineynoye Prospect o Long term production test during Winter 2007/08 - Field development and infrastructure improvements to be sanctioned to meet first production 2009 target PetroNeft Resources plc, 100% owner of Stimul-T, the sole owner and operator ofLicence 61, Tomsk Oblast, Russian Federation, is pleased to announce that it hasagreed the terms of a conditional placing of 15,145,743 new Ordinary Shares atStg£0.50 (€0.74) per Ordinary Share (the "Placing Shares"), raising grossproceeds of approximately US$15.26 million ("the Placing"). Davy and NatixisBleichroeder acted as Joint Brokers to the Placing. Certain Directors of PetroNeft will subscribe for the following Placing Shares: Placing Shares subscribed Resulting holding of % of Enlarged Share for Ordinary Shares Capital Dennis Francis 99,226 20,388,843 10.6%David Sanders 25,000 4,205,605 2.2%Tom Hickey 99,226 764,226 0.4%Vakha Sobraliev 99,226 23,014,273 12.0% Completion of the Placing will be conditional on admission to trading on AIM andIEX of the Placing Shares. Application has been made for the admission of thePlacing Shares to trading on both AIM and IEX ('Admission') and it is expectedthat Admission will occur and that dealings will commence on AIM and IEX on 16July 2007. The Placing Shares will rank pari passu in all respects with theexisting Ordinary Shares currently traded on AIM and IEX. Following Admissionthere will be 191,771,001 Ordinary shares in issue. The net proceeds of the Placing will be used to finance the Company's 2007/08Exploration, Delineation and PreProject Activities and for corporate andadministration expenses. This includes: 1. Winter 2007/08 Drilling Programme The results of the 2006/07 seismic and drilling programmes have been used todefine drilling targets and turnkey contracts have been finalised with OOONizhnevartovskeservis for the use of the three rigs currently mobilised inLicence 61 for the Winter 2007/08 drilling programme. PetroNeft intends to drill two low risk exploration wells in the Tungolskoye -Lineynoye productive oil fairway. These exploration wells will be drilled onthe Korchegskaya and West Korchegskaya Prospects, which are estimated to containa combined 53 million barrels of Possible Reserves. Development of theseProspects tie-in to the planned Lineynoye and Tungolskoye Field DevelopmentInfrastructure. A delineation well is also expected to be drilled on the West Lineynoye Prospectto provide further data for the Field Development Programme (Lineynoye No. 7, ahigh impact exploration well is currently being drilled on this prospect whichis estimated to contain 67 million barrels of Possible Reserves). In addition, PetroNeft will undertake a long-term production test during theWinter 2007/08 period on one or more of the wells drilled during the 2006/07drilling programme. 2. Field Construction Activities Pipeline Engineering Design, Survey and Approvals Contract As previously announced, PetroNeft has entered into a contract with 'ETCService' LLC for the design, survey and approval of an export pipeline from theLineynoye and Tungolskoye fields to the Transneft pipeline at the Raskinopumping station. The contract also includes the design and approvals for thecustody transfer point at the Transneft regional pipeline tie-in point. Theaward of this contract is a critical step in the ultimate development andcommercialisation process in respect of current and potential future discoverieson Licence 61 and for first oil production in 2009. Infrastructure Construction In the Winter 2007/08 period, PetroNeft will undertake the construction ofbridge and road infrastructure to facilitate all year round field access andpipeline mobilisation. Commenting on the announcement, Dennis Francis, Chief Executive Officer of PetroNeft Resources plc said: "We are delighted to have received such positive support from the markets forthis oversubscribed offering. We feel that in a short time we have proven thatan experienced Western and Russian management team, backed up with excellentlocal contractors, can create real shareholder value in independent Russian oil. These funds will allow us to build on our original successes. Drillingcommencing in the winter of 2007/08 will increase our reserves, adding furthervalue to our core territory of Licence 61. We remain committed to an early firstcontinuous production date in 2009, and these funds will be used to bothproduction test and further develop the necessary infrastructure. This has been a good first year as a public company. With these new funds, webelieve that our team can both replicate recent successes and further enhancePetroNeft's value as we move towards first production." Contacts 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 Damien Mauvais, Natixis Bleichroeder+44 207 220 5184 Nick Elwes / Paddy Blewer, College Hill+44 207 457 2020 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