14th Jan 2015 11:09
LONDON (Alliance News) - Urals Energy PCL Wednesday said it expects production from its assets in Russia to increase this year as it continues to drill new wells and complete workovers on others.
At the ArticNeft project in Russia, the company has completed a workover of the #546 well, which had been out of operation for 10 years. The well is now producing 52 barrels of oil per day and is the first completed workover from a total programme of six wells.
Once all six wells have been completed, Urals is expecting production to increase before the end of 2015 to between 700 and 720 barrels of oil per day, compared to the current average of 661 barrels of oil per day.
Urals is also conducting a "more aggressive" programme to develop fracking capabilities at the project but said this will not materialise until 2016 due to the current oil price.
At the Petrosakh project, also in Russia, the company is expecting results from the latest well to be drilled on site in the next few weeks. The company has plans to drill another two wells and carry out further workovers of other wells during 2015.
Current production at the Petrosakh project is 1,155 barrels of oil per day, and Urals is expecting this to increase to between 1,325 and 1,355 barrels of oil per day by the end of 2015 when the new wells and workovers are completed.
On January 9, a fire broke out at the company's Petrosak refinery, caused by an accident which occurred during bad weather conditions. In its announcement, Urals said it was "urgently" trying to replace damaged equipment and bring the plant back into operation.
Urals has said that the refinery remains shut and that the electrical control equipment suffered the majority of damage. The company is trying to source the replacement parts locally and said it can not guarantee when the refinery will come back online, but said adequate storage facilities on site mean operations should be unaffected, even if there is a significant delay in restarting the refinery.
On Tuesday, Urals had said it has signed a settlement agreement with former director Viatcheslav Rovneiko, ending a dispute over a USD3.7 million loan the company granted to Rovneiko.
As part of the settlement, Rovneiko has agreed to withdraw his claim to recover USD41 million from the company, and Urals has agreed to terminate its recognition and collection efforts over the USD6.8 million plus interest that the London Court of International Arbitration ruled Rovneiko must pay.
Urals Energy shares were up 1.7% to 4.32 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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