VGAS.L Regulatory News (VGAS)

30 Mar 2009 07:00



30 March 2009

VOLGA GAS PLC

Reserve Report and Drilling Update

Volga Gas Plc ("Volga Gas" or the "Company") the independent oil and gas exploration and production company, which currently holds four subsoil licenses in the Volga Region of European Russia is pleased to provide an update on supra-salt activities drilling in its Karpenskiy Licence Area.

Highlights

Uzenskaya Reserves Classification

Russian category C1 and C2 recoverable reserves have been calculated following the results of Uz#3 and Uz#4 wells and approved at State Reserves Committee as follows:

Crude Oil Reserves

C1 Recoverable  0.983 million tonnes  (7.37 million barrels)

C2 Recoverable   0.886 million tonnes  (6.51 million barrels)

Total C1/C2 1.869 million tonnes  (13.88 million barrels)

Uzenskaya drilling update

Well Uzenskaya#6 was spudded in February 2009 targeting the principal Cretaceous reservoir, which is productive in the Uz#3, Uz#4 and Uz#5 wells. The well has reached its target depth of 1,100 metres without encountering the anticipated reservoir. Testing of other layers is ongoing.

Meanwhile the Uzenskaya#7 exploration well was spudded in March and is expected to complete during April. The well is being drilled on the East Uzenskaya prospect on a location approximately 7km east of the main Uzenskaya field processing facilities.

Mikhail Ivanov, Chief Executive of Volga Gas commented:

"Following three very successful well results on the Uzenskaya field, all of which are now in production and producing at a daily rate of 1,200 barrels of oil per day; Uz#6 was clearly a disappointment, however, we do not expect the well result to have a significant impact on the reserves reported today. 

"The Russian C1/C2 reserve classification we have been given reflect principally the success with the Uz#3 and Uz#4 wells. We are hopeful that the Uz#5 well will convert some of the C2 reserves into C1 reserves"

The Company expects to announce its financial results for the year to 31 December 2008 on Tuesday, 31st March.

For additional information please contact:

The information contained in this announcement has been reviewed and verified by Mr. Mikhail Ivanov, Director and Chief Executive Officer of Volga Gas plc, for the purposes of the Guidance Note for Mining, Oil and Gas companies issued by the London Stock Exchange in March 2006. Mr. Mikhail Ivanov holds a M.S. Degree in Geophysics from Novosibirsk State University. He has also MBA degree from Kellogg School of Management (Northwestern University). He is a member of the Society of Petroleum Engineers.