18 Nov 2010 14:03
18 November 2010
Urals Energy Public Company Limited
("Urals Energy" or the "Company")
Settlement of First Petraco Installment and Operational Update
Urals Energy (LSE: UEN), an independent exploration and production company with operations in Russia, announces that it has settled the first US$3 million tranche due to Petraco Oil Company ("Petraco"), in accordance with the Restructuring Agreement dated 12 April 2010. The settlement was made by means of an off-set of Petraco debt to the Company for the crude oil delivered in October 2010 from the Company's Arcticneft operations.
Drilling results
As was reported on 10 November 2010, the Company has completed drilling its first side track well 35b at Petrosakh. The well was perforated in the interval from 1,470 meters to 1,535 meters. Tubing was lowered to a depth of 1,478 meters, where material accumulated in the hole as a result of the lost-circulation encountered while drilling through the pay zone prevented the tubing from being run further down the hole.
The board is pleased to announce that the well is currently flowing naturally at a rate of 20 tons per day (152 BOPD) with an 8% water cut on a 19mm choke. The well has produced for six days and is still flowing back drilling fluid and cuttings, as a result of the lost circulation encountered while drilling through the pay zone. The Company will continue working towards removing the lost circulation material from the well and commencing full scale production from the perforated horizon. Considering the well's apparent high permeability, (confirmed by the lost circulation in the pay zone), the Company will reassess the use of pumps, or an upgrade in the pump type from the originally planned rod pump to ESP should the well's final productivity warrant it. Further results of performance of well 35b will be reported in due course.
Drilling of the next side track at Petrosakh will commence in January 2011, given the time required for logistics, including bringing new drilling materials to the site from the mainland.
Current production
Production at Arcticneft remains at a level of 712 BODP
Total current daily production, from both Arcticneft and Petrosakh stands at 2,475 BOPD
Enquiries:
Urals Energy Public Company Limited +7 495 795 03 00
Alexei Maximov
Grigory Kazakov
Allenby Capital Limited +44 (0)20 3328 5656
Nick Naylor
Alex Price
Pelham Bell Pottinger +44 (0)20 7861 3232
Mark Antelme
Jenny Renton