16th Apr 2019 14:57
LONDON (Alliance News) - Zoltav Resources Inc on Tuesday said the Western gas plant at its Bortovoy licence in Russia operated efficiently in 2018, with production declining more slowly than expected.
Shares in Zoltav were up 6.8% at 38.44 pence in afternoon trade.
The gas plant experienced only one 48-hour scheduled shutdown in 2018 and had an average net daily production of 33 million cubic feet per day of gas, down 18% from 40.4 million cubic feet per day in 2017.
Oil and condensate production in 2018 dropped 11% to 301 barrels per day from 337 barrels the year before.
"The natural production decline from existing well stock continued at a slower rate than predicted, primarily due to Zhdanovskoye well 8 remaining on production throughout 2018 and the well head compressor having been put into operation on the Karpenskoye field," said Zoltav.
Zoltav is trying to reverse this production decline and will drill two sidetracks on existing wells on the Zhdanovskoye field at Bortovoy. The first well, Zhdanovskoye well 103, is expected to spud in the second quarter of 2019.
Both wells are due to be put on production before the end of 2019 to add around 11 million cubic feet per day of gas and to raise daily condensate production by 3%.
Moreover, the Mokrousovskoye block at Bortovoy has been found to contain two prospective gas fields, after the interpretation of seismic data, both of which need drilling.
Given the other commercial opportunities at the licence, Zoltav will focus in the near-term on its existing low-risk reserves in the western and eastern fields of Bortovoy before moving onto exploratory drilling in these newly identified fields.
At East Bortovoy, where around 70% of the Bortovoy licence proved and probable reserves are located, USD2.5 million has been budgeted for re-entering and evaluating production rates, gas composition, and the conditions of existing Soviet wells.
Tigran Tagvoryan, chief executive at Zoltav, said: "I am pleased that previous exploration activities carried out over the Mokrous area confirm the further exploration potential of the Bortovoy licence. These, and other opportunities for additional assets, will form part of our mid- to long -term exploration strategy.
"However, my near-term focus is on bringing current reserves into production with the lowest possible risk, while preserving opportunities for exploration upside in due course. This development strategy naturally focuses on the east of the licence which accounts for 70% of the substantial [proved and probable] gas reserves. Initial results from well re-entries are encouraging and are contributing to the detailed feasibility analysis that is ongoing."
"In the meantime, we are poised to drill the first two sidetracks on existing well stock in the western fields as part of the strategy to increase production from these fields. Both wells are anticipated to be on production by year-end," he added.
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