Operations Update

July 22, 2015

22 July 2015

PetroNeft Resources plc

(“PetroNeft” or the “Group” or the “Company”)

Operations Update

PetroNeft (AIM: PTR) an oil & gas exploration and production company operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of License’s 61 and 67 is pleased to provide an update on operations at Licence 61.



• T-503 horizontal well brought online at sustained rate of over 550 bopd.

• Latest test rate was 675 bopd.


• Processing and interpretation of 1,000 km of high quality 2D seismic underway.

• Early indications suggest that the Sibkrayevskoye structure is larger than previously understood.


• L-10 well horizontal segment in progress.


• Current gross production from Licence 61 about 2,400 bopd.

Tungolskoye Development

The T-503 well at Tungolskoye has been successfully completed with a horizontal segment of 1,000 metres in the Upper Jurassic J1-1 horizon at a depth of approximately 2,502 metres TVD. Of the 1,000 metres horizontal segment it is estimated that approximately 663 metres is in effective net pay. The well was brought online on 14 July and the average flow rate over the last five days has been over 550 bopd (750 bfpd). The well is still cleaning up the long horizontal section and the water cut is now below 20% and continuing to reduce. The well will be allowed to continue in this mode for a period to monitor its performance. Higher oil rates should be possible once the well has fully cleaned up completion and drilling fluids. The latest test rate, on 21 July 2015, was 675 bopd (755 bfpd at 10% water cut).

The Tungolskoye T-51B well has also been completed. While it provided the necessary stratigraphic control for the T-503 horizontal well, the reservoir in this vertical well was tight in the J1-2 and it was not possible to produce from it. The well will ultimately be used as the water source well for pressure maintenance programme at Tungolskoye.

The T-508 vertical well is now drilling ahead; the primary purpose of this well is to provide the necessary stratigraphic information for the drilling of a horizontal well in the south-east of the oil field, and will be completed as either a producer or injector.


Following the success of the Sibkrayevskoye No. 373 appraisal well announced in May 2015, work on the processing and interpretation of the new 1,000 km 2D seismic acquired in the northern part of Licence 61 is well under way. Early indications are that the Sibkrayevskoye structure is significantly larger than currently mapped and extends to the southeast, including the East Sibkrayevskaya lead under one overall closed structure. A reserve update will be prepared at the end of the year incorporating the new seismic and well data and the development plan updated accordingly.

West Lineynoye

The vertical pilot hole of the L-10 well has been drilled and logs show approximately 2.5 metres of excellent quality sandstone in a 4.0 m gross sandstone interval in the Upper Jurassic J1-1 reservoir at a depth of 2,367 metres TVD. While the reservoir was present, no oil was found in the secondary objective J1-2 interval. The horizontal segment of the well is now underway. The well will intercept the J1-1 reservoir about 12 m higher on the structure to the L-8 exploration well which is currently producing 50 bopd from a vertical section of the J1-1 sandstone. The well is being drilled from a surface location near the L-8 well and can immediately be tied-into the Lineynoye facilities through existing infrastructure.


Current gross production at Licence 61 is about 2,400 bopd.

Dennis Francis, Chief Executive Officer of PetroNeft Resources plc, commented:

“We are very pleased with the T-503 well result, which clearly demonstrates the potential for materially enhanced flow rates to be achieved from horizontal production wells. While the well is still cleaning up initial indications of its productivity are very good. We are also looking forward to the L-10 horizontal well result in the coming weeks and a production increase from this well.

While our near term focus remains on production growth, we are also very encouraged by the potential significant reserve upside at Sibkrayevskoye which is already our largest field at around 50 million barrels (gross). We look forward to deepening our understanding of this field over the coming months.”

For further information, contact:

Dennis Francis, CEO, PetroNeft Resources plc

+1 713 988 2500

Paul Dowling, CFO, PetroNeft Resources plc

+353 1 647 0280

John Frain/Brian Garrahy, Davy (NOMAD and Joint Broker)

+353 1 679 6363

Henry Fitzgerald-O’Connor, Canaccord Genuity Limited (Joint Broker)

+44 207 523 8000

Martin Jackson/Shabnam Bashir, Citigate Dewe Rogerson

+44 207 638 9571

Joe Heron / Douglas Keatinge, Murray Consultants

+353 1 498 0300

The information contained in this announcement has been reviewed and verified by Mr. Dennis Francis, Director and Chief Executive Officer of PetroNeft, for the purposes of the Guidance Note for Mining and Oil & Gas Companies issued by the London Stock Exchange in June 2009. Mr. Francis holds a B.S. Degree in Geophysical Engineering and a M.S. Degree in Geology from the Colorado School of Mines. He has also graduated from the Harvard University Program for Management Development. He is a member of the American Association of Petroleum Geologists and the Society of Exploration Geophysicists. He has over 40 years’ experience in oil and gas exploration and development.


2P reserves

Proved and probable reserves as defined by the standards of the Society of Petroleum Engineers


Barrels of fluid per day


Barrels of oil per day






Million barrels


True vertical depth