Figure 1 shows the Key Milestones to PetroNeft's work programme on Licence 61 since acquiring the block in 2005. The Milestones show the step by step approach that the Company has taken with respect to the evaluation of the Licence area. This same approach will be applied to Licence 67 which was acquired in 2010.
In 2005 the Company reprocessed 1,392 kms of vintage seismic data in the northern part of the Licence and reprocessed 14 vintage wells drilled on the Licence. This data was then used to design the 2006 seismic acquisition programme of 515 kms of 2D data. In 2006 the Company reprocessed 1,262 kms of vintage seismic data in the southern part of the Licence which was used to design the 2007 seismic programme of 540 kms of high resolution 2D data.
One exploration and two delineation wells were drilled in 2007 and one delineation and two exploration wells were drilled in 2008 based on the above data. The six wells drilled to date complete the exploration drilling obligation for the 25 year term of the licence.
In 2010 one exploration well was drilled in Licence 61 resulting in the discovery of the Arbuzovskoye oil field. In Licence 67, twenty one vintage exploration wells and 4,432 km of vintage seismic data were reprocessed and reinterpreted in 2010. This evaluation resulted in the 2P reserve addition at the Ledovoye field.
Figures 2 and 3 show the SPE 2P and 3P reserves and exploration resources (P4) movement over time as a result of the above work programmes. The 2P reserves have increased from 27.89 to 96.93 million barrels and the 3P+P4 reserves + exploration resources have increased from 183.62 to 640.69 million barrels.
Figure 4 shows the breakdown for the combined reserves and resources for Licence 61 and Licence 67. All Prospects have well developed 4-way dip closure: however, where possible reserves (P3) are ascribed to a Prospect there must be a prior well on the structure with potential by-passed pay identified in the target horizon.
Figure 5 shows the potential reserve increases based on the 5 well exploration/delineation drilling programme for Licences 61 and 67 in 2011.