12th Nov 2014 09:48
LONDON (Alliance News) - Volga Gas PLC Wednesday said its new well in the Volga region in Russia continues to be suspended and is not expected to be completed until next year, delaying production growth from the oilfield until the middle of 2015.
Its drilling operations on the VM 3 well continues to be hampered. In September, Volga said the well had encountered mechanical difficulties, and the drill pipe had got stuck at a depth of 2,556 metres. Since the announcement, the drilling contractor has tried to remove the pipe but has been unsuccessful and operations at the well continue to be suspended.
The well will remain suspended whilst the company looks at a cost effective solution, likely to involve drilling a sidetrack hole next to the existing bore hole. Volga Gas said the cost of the well to date has not been affected by the suspension as it is being drilled on a turnkey contract basis.
As a result, the company does not expect the well to be completed until the first-half of 2015 and will delay the expected production growth at the oilfield until the middle of next year, Volga Gas said in a statement.
The company's production from its existing wells in the Volga region of Russia during the last quarter has remained stable, producing around 4,700 barrels of oil equivalent per day. This is slightly above the average production of 4,419 barrels of oil equivalent per day achieved from the project in the first half of the year.
In the same statement, Volga said the formal sale process, in which the company is seeking a buyer for the itself, originally announced in June, was still ongoing, and the company will update the market as and when relevant.
Volga shares were untraded on Wednesday, last quoted at 95.00 pence per share.
By Joshua Warner; [email protected]; @JoshAlliance
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