1st Dec 2005 07:01
Victoria Oil & Gas PLC01 December 2005 1 December 2005 Victoria Oil & Gas Plc Project Portfolio Update - Q4 2005 • Kemerkol Oil Project, Kazakhstan - contract signed for re-entry ofthree shut-in wells to commence in December and drilling of twin well in January • West Medvezhye Gas and Condensate Project, Russia - contract formobilisation of Wells 106 and 103 agreed with drilling expected to commence Q12006 • Tamdykol Oil Project, Kazakhstan - First exploratory well (1E)completed by farm-out partners NEK and extension requested to fund and operate10 wells (4 agreed under current farm-out terms) The Board of Victoria Oil & Gas Plc ("Victoria" or "the Company")(tic:VOG), theAIM-quoted oil and gas company focused in the Former Soviet Union, todayannounces updates on its gas/gas condensate and oil projects for the finalquarter of 2005. Kemerkol Oil Project, Atyrau Oblast of Kazakhstan A contract has now been signed with oil services company Smith International forthe re-entry of three shut-in wells during December 2005 and the drilling of asingle twin well in January 2006. Initial production capacity from these fourwells is expected to be around 500 barrels of oil per day with first productionexpected in Q1 2006. During 2006, Victoria intends to drill and complete a further seven new wells onthe licence block, with the potential to take production up to 1,800 barrels perday by the end of December 2006. The Company is also finalising details for afull 3D seismic survey to cover the entire 65 square kilometre licence area,which will increase Victoria's understanding of the potential at Kemerkol inaddition to the resource already delineated. West Medvezhye Gas/Gas Condensate Project, Western Siberia, Russia Mobilisation of Wells 106 and 103 is scheduled for December 2005 with drillingcommencing Q1 2006 following agreement with oil and gas project managers AtlasInternational. Under the terms of the Minimum Work Programme, a total of twofurther wells will be drilled at the licence by mid-2006. Well 106 is an appraisal well that will be drilled in the proximity of Well 104to prove further resources following confirmation by international reservoirauditors DeGolyer & MacNaughton ("D&M") of preliminary expected recoverableresources for the field of 500 billion cubic feet this November (for furtherinformation please refer to the Company's website). Well 103 is a secondexploration well to test a separate structure on the licence block, to the southwest of Well 104. Well testing equipment for Well 104 has been acquired byVictoria and is currently en-route to the site for testing to begin at thebeginning of next year. Tamdykol Oil Project, Aktyubinsk Oblast of Kazakhstan Well 1E, the first of four exploration wells to be drilled at Tamdykol, wascompleted to a depth of 1,098 metres and was put on test by NEK Service LLP ("NEK"), a local company with whom Victoria signed a farm-out agreement earlierthis year to finance and conduct the Tamdykol Minimum Work Programme. Testing ofthe Jurassic intervals intersected is currently on-going, but results from thepetrophysical logs and subsequent well tests have so far not indicated thepresence of commercial volumes of hydrocarbons. Following analysis of thesubsurface data obtained from drilling, NEK have proposed a revision of thefarm-out agreement to increase the number of wells to be drilled from four toten. The proposal from NEK also provides that the term of the agreement beextended from five years to six and a half years in exchange for theircommitment to fund and drill additional wells. Final results of well test and signing of the revised farm-out agreement areexpected in December. Speaking on the projects earlier today, Executive Director William Kellehersaid, "With our significant gas discovery at West Medvezhye and developments atboth Kemerkol and Tamdykol, Victoria is finishing 2005 in a strong operationalposition. Rig availability for West Medvezhye has been better than anticipatedand we look forward to D&M reassessing the resource volumes following thefurther drilling. "The signing of the contract with Smith for Kemerkol brings our goal ofnear-term production and cash flow another step closer. We are on target to haveoil production in 2006 and Kemerkol has the potential to become a significantcash generator. Meanwhile, the data provided from the first exploration well atTamdykol has greatly enhanced our knowledge of the subsurface and we lookforward to being able to confirm an agreement to extend the farm-out agreementto ten wells as per NEK's request." For further information please contact:Kevin Foo / George Donne Jamie Cumming / Tracy MackenzieVictoria Oil & Gas Plc Bell Lawrie+44 (0)207 921 8820 +44 (0)141 314 8103 +44 (0)141 314 8220Leesa Peters/ Laurence ReadConduit PR+44 (0)207 618 8760+44 (0)7979 955 923 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
VOG.L