31st Mar 2008 08:43
Victoria Oil & Gas PLC31 March 2008 31 March 2008 Victoria Oil & Gas Confirmation of compliance with all licence terms and proven reserves for Well 103 for West Medvezhye Project, Russia • Russian authorities confirm full compliance with licence conditions,expected to trigger commencement of 18 year production phase for West Medvezhye • Official calculation of proven C1 and C2 reserves of 39.6 millionbarrels of oil in place with recoverable reserves of 11.9 million barrels forWell 103 • Blackwatch and GeoDynamics to assist Victoria in a full review of nextexploration target, Well 105 Victoria Oil & Gas Plc ("Victoria" or "the Company")(AIM:VOG), the oil and gascompany focused in the Former Soviet Union, announces today an update on Well103 at its wholly-owned West Medvezhye gas and gas condensate project inSiberia, Russia ("West Med"). Following the expiry of the exploration phase of the West Med licence on 31December 2007, Victoria submitted detailed information on all exploration workundertaken by the Company at West Med, including the testing of Well 103, to theMinistry of Natural Resources (the "MNR") and Russian Subsoil Use Committee. On completion of their review, the Yamal-Nenetsk division of the Subsoil UseCommittee has officially confirmed full compliance with the minimum workprogramme for the exploration phase of the West Med licence. The RussianMinistry of Natural Resources has in turn issued an official protocol detailinga calculation of proven oil and gas reserves under Russian standards to be addedofficially to the State Reserve Balance, which are summarised as follows: C1 Oil in place Oil 0.629 million tonnes Recoverable Oil 0.189 million tonnes Gas 0.039 million tonnes oil equivalent C2 Oil in place Oil 4.398 million tonnes Recoverable Oil 1.319 million tonnes Gas 0.276 million tonnes oil equivalent C1+C2 Oil in place Oil 5.027 million tonnes Recoverable Oil 1.508 million tonnes Gas 0.315 million tonnes oil equivalent The MNR is now expected to approve official registration of a discovery at WestMed, which would facilitate the conversion of the licence term from explorationto production. The production phase will last until April 2026, with thepossibility of further extension. The Company will not be required to commenceproduction immediately, but an initial five year development programme coveringfurther exploration and drilling will be agreed in due course with the MNR. The reserve calculation, which equates to total recoverable oil reserves ofapproximately 11.9 million barrels and total recoverable hydrocarbon reserves(including gas) of 14.4 million barrels of oil equivalent, is based solely ontest data from the J2 horizon for Well 103. Well 103 was drilled to test justone of 25 prospects in the West Med licence area identified by independentreserve auditors DeGolyer and MacNaughton and the J2 horizon itself, which wasintersected at a depth of around 3,795 metres, is just one of six targethorizons. Focus will now turn to the further exploration of the next target location, Well105. During 2008 it is intended that a team from Blackwatch Petroleum Servicesand GeoDynamics Research will evaluate the existing data for all remainingprospects and assess the potential application of GeoSpectra IDPS passiveseismic technology. Kevin Foo, Chairman of Victoria, said, "These events, in particular theconfirmation of full compliance with our license terms for West Med areimportant events for the Company and will now allow us to plan for long-termdevelopment. We are delighted to record our first proven reserves for the field,however, we believe that this is just the beginning as they reflect only a smallpart of a much greater resource. We are still focused on exploration at WestMed, so thorough planning for and exploration of Well 105 is our next goal." Sam Metcalfe, the Managing Director of Blackwatch also commented, "This protocolgives the Company a sound platform for further development of West Med. We havea good set of data from the testing of Well 103 and we expect the constraint ofoperating within the shorter term exploration phase of the licence to bereleased. Our efforts at West Med for the remainder of 2008 will now bededicated towards locating the most prospective areas for further investigation." For further information, please contact:Kevin Foo / George Donne Jonathan Charles / Ed PortmanVictoria Oil & Gas Plc Conduit PR+44 (0)207 921 8820 +44 (0)207 429 6607 +44 (0)7733 363 501 Toby Hayward / Oliver GriffithsJefferies International+44 (0)207 029 8000 The information in this release has been reviewed by Eckhard Mueller, who is aqualified person for the purposes of the AIM Guidance Note for Mining, Oil andGas Companies. Mr. Mueller is the chief geologist for Victoria Oil & Gas Plcand is qualified in petroleum engineering and geology with over 30 yearsexperience in oil and gas exploration and production. About Victoria: Victoria Oil & Gas Plc is focused on the exploration for andproduction of oil and gas in the Former Soviet Union. The Company is sole ownerof the West Medvezhye gas and gas condensate project in Western Siberia, Russiaand the Kemerkol oil field in the Atyrau Oblast of Kazakhstan. West Medvezhyehas independently appraised prospective resources of 1.1 billion barrels of oilequivalent and Kemerkol has proven recoverable C1 + C2 reserves of 35 millionbarrels of oil and is currently in production. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
VOG.L