19th Feb 2008 07:00
Petroneft Resources PLC19 February 2008 PetroNeft Resources plc Announcement of Independently Audited Reserves PetroNeft Resources plc ('PetroNeft' or 'the Company'), is pleased to announce asignificant increase in Reserves on Licence 61, Tomsk Oblast, RussianFederation, following completion of a Ryder Scott Petroleum Consultantsindependent reserves audit of the Licence area. Highlights O 81 % increase in 2P reserves to 60.6 million bbls O Ryder Scott report net reserves under SPE classification of: o 1P: 6.7 million bbls o 2P: 60.6 million bbls (P1+P2) o 3P: 350.1 million bbls (P1+P2+P3) O Long term test/pilot production commences O First oil sales achieved O 2008 Exploration and Appraisal drilling programme progressing Ryder Scott Reserves Report Following the successful exploration and appraisal programme undertaken inLicence 61 during 2007, PetroNeft's net proved and probable (2P) oil reserves asof January 1, 2008 increased by 81% to 60.6 million barrels. Proved (1P) oilreserves increased to 6.7 million and proved plus probable plus possible (3P)reserves increased to 350.1 million barrels. A total of 3 oil fields and 26prospects were included in the report. PetroNeft's reserves have been revised following the recent independent reserveappraisal conducted by Ryder Scott Petroleum Consultants in accordance withreserve definitions approved by the Society of Petroleum Engineers (SPE) andWorld Petroleum Congress. The Russian Registered reserves for Licence 61 are also currently being updated.It is anticipated that this process will be finished in March and that therewill be good alignment with the SPE based reserves. Update on Production Testing The long term test/pilot production of the Lineynoye No. 6 and No. 7 wells isprogressing as planned. The Lineynoye No. 6 well has now been commissioned andis currently producing at a stabilised flow rate of 226 bopd. The Lineynoye No.7 well is currently being hooked-up and should be commissioned in about 10 days,with production starting. The production tests will continue as long as winterroads are in place to truck the oil. The production data will assist inplanning the optimal well fracture programme to stimulate production and enhancelong-term reserve recovery from the fields Update on Drilling Activities The three existing drilling rigs are all being moved to the new drilling sitesfor this year's planned exploration and delineation drilling programme. Thedrilling rig for the Korchegskaya Prospect is now completely moved and is beingassembled. This will be the first well drilled, commencing in March as planned. Ryder Scott estimates 36 million barrels of possible reserves for thisprospect. A truck mounted work-over rig has been contracted and is being prepared to bemoved to the Tungolskoye No. 4 well in March to continue the testing of thatsuspended well. Dennis Francis, Chief Executive Officer of PetroNeft commented: "This reserves increase shows the major progress that we have made in appraisingLicence 61 this past year. Management has successfully made good on its IPOpromise: to monetise and add to the value of the portfolio by increasing bookedreserves, discovering new reservoirs and moving towards production as soon aspossible. PetroNeft has not only proved a significant reserve base for development, butalso has built up a high quality inventory of prospects which offer upsidethrough exploration over the medium term. We will continue to maintain our focus on developing the existing fields andkeep on track for our targeted pipeline production in 2009, whilst remainingopen to any new opportunities which management believes would be worthy ofconsideration " For further information, contact: Dennis Francis, CEO, PetroNeft Resources plc (Houston)+1 713 988 2500 Paul Dowling, CFO, PetroNeft Resources plc (Dublin)+353 144 33720 Desmond Burke, Director Investor Relations, PetroNeft Resources plc (Ireland)+353 52 53226 John Frain/Brian Garrahy, Davy+353 1 679 6363 Damien Mauvais, Natixis Bleichroeder+44 207 220 5184 Nick Elwes/Paddy Blewer/Simon Whitehead, College Hill (UK)+44 207 457 2020 The information contained in this announcement has been reviewed and verified byMr. Dennis Francis, Director and Chief Executive Officer of PetroNeft, for thepurposes of the Guidance Note for Mining, Oil and Gas Companies issued by theLondon Stock Exchange in March 2006. Mr. Francis holds a B.S. Degree inGeophysical Engineering and a M.S. Degree in Geology from the Colorado School ofMines. He has also graduated from the Harvard University Program for ManagementDevelopment. He is a member of the American Association of Petroleum Geologistsand the Society of Exploration Geophysicists. He has over 34 years experiencein oil and gas exploration and development. Forward Looking Statements This announcement contains forward-looking statements. These statements relateto the Company's future prospects, developments and business strategies.Forward-looking statements are identified by their use of terms and phrases suchas "believe", "could", "envisage", "potential" "estimate", "expect", "may", "will" or the negative of those, variations or comparable expressions, includingreferences to assumptions. The forward-looking statements in this announcement are based on currentexpectations and are subject to risks and uncertainties that could cause actualresults to differ materially from those expressed or implied by thosestatements. These forward-looking statements speak only as at the date of thisannouncement. Glossary Proved Reserves (P1) - Proved reserves are those quantities of petroleum which,by analysis of geological and engineering data, can be estimated with reasonablecertainty to be commercially recoverable, from a given date forward, from knowreservoirs and under current economic conditions, operating methods, andgovernment regulations. Probable Reserves (P2) - Probable reserves are those unproved reserves whichanalysis of geological and engineering data suggests are more likely than not tobe recoverable. In this contest, when probabilistic methods are used, thereshould be at least a 50 percent probability that the quantities actuallyrecovered will equal or exceed the sum of estimated proved plus probablereserves. Possible Reserves (P3) - Possible reserves are those unproved reserves whichanalysis of geological and engineering data suggests are less likely to berecoverable than probable reserves. In this context, when probabilistic methodsare used, there should be at least a 10 percent probability that the quantitiesactually recovered will equal or exceed the sum of estimated proved plusprobable plus possible reserves. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
PTR.L