Update on 2018 Work Programme

March 22, 2018

PetroNeft Resources plc ('PetroNeft' or 'the Company')

Update on 2018 Work Programme

PetroNeft (AIM: PTR) an oil and gas exploration and production company operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67 is pleased to announce the details of its 2018 work program. 


• Drilling of the Cheremshanskoye No. 4 (C-4) Appraisal Well in Licence 67.
• Continued testing at Sibkrayevskoye in Licence 61.
• Studies for West Lineynoye L-8 Lobe Development in Licence 61.

Licence 67
A delineation well will be drilled at the Cheremshanskoye oil field in Licence 67. The C-4 well is designed to further delineate and de-risk the Cheremshanskoye field in advance of field development.  Three prior wells have been drilled on the field, most recently in 2011 by PetroNeft and oil has been identified and tested in 4 different intervals in the field: the Lower Jurassic J-14 and J-13 intervals and the Upper Jurassic J1-1 and J1-3 intervals.  These initial wells were drilled without the benefit of modern 3D seismic data which was acquired in 2014. The C-4 well is designed to test a large portion of the field which is structurally higher than the previous wells based on this recently acquired 3D seismic data.

The primary reservoir target is the J1-3 interval which is approximately 10 m in thickness throughout the region and is the primary reservoir at the adjacent producing Lomovoye field operated by TomskNeft.  The J1-3 interval tested 240 bopd of light oil (40°API) on natural flow in the adjacent Lomovoye No. 208 well.  

The secondary reservoir target is the J14 interval which had a natural flow of 33 bopd of light oil (49°API) from 6.5 m of net pay in the 2011 Cheremshanskoye No. 3 well.  The current Russian State (GKZ) registered reserves for this interval are about 16 million bbls gross recoverable C1+C2 reserves.

Tomsk Geophysical Company estimates the Russian C3 gross reserves for all 4 intervals at about 75 million bbls recoverable for the field, based on the 3D seismic and log evaluation of the existing wells.

Based on the results of a competitive tender the drilling contract was awarded to SSK Drilling, a large drilling contractor with operations throughout Russia.  The drilling rig and necessary supplies will be mobilised to the location this winter while winter roads are in place and the well will be drilled this summer. The well is being drilled under the joint venture agreement with our partner for Licence 67, Arawak Energy on a 50:50 basis.  PetroNeft’s proportion of the well costs will be funded from existing resources.

Licence 61
We will continue to test the S-373 and S-375s wells for the remainder of the 2018 winter season. This data will then be used to plan for future development at Sibkrayevskoye which requires a 26 km pipeline back to the Lineynoye Central Processing Unit.

We are also re-evaluating the development of the West Lineynoye L-8 Lobe.  This is based on the good results from the 2 horizontal wells at South Arbuzovskoye in 2016 where we have similar thin pays with good reservoir properties in the continuous J1-1 interval.  We also have existing infrastructure which ties the L-8 Lobe to the Central Processing Unit at Lineynoye. This development would monetize about 10 million bbls of 2P reserves.   

Dennis Francis, Chief Executive Officer of PetroNeft Resources plc, commented:  
“We look forward to drilling the C-4 well which we feel has great potential as it will test multiple targets up-dip from nearby wells that have already tested oil in the same intervals.  This is the first well to be drilled by the Company based on the modern 3D seismic data acquired in 2014.”

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
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.