Reporting & Operations Update

RNS Number : 0544P

Petroneft Resources PLC

16 June 2022

 

PetroNeft Resources plc

16^th June 2022

PetroNeft Resources plc ('PetroNeft' or 'the Company')

Reporting & Operations Update

PetroNeft provides the following updates.

Highlights

· The board of PetroNeft is saddened and deeply concerned by the Russia-Ukraine conflict and hopes that a peaceful resolution will be found soon. We  continue to monitor the situation on a daily basis, including sanctions and any potential restrictions imposed, and will keep shareholders updated as appropriate. We continue to operate within Government guidelines in all markets in which we operate.

· Licence 61

o  Reservoir stimulation program successfully completed on schedule, within budget, with results as modelled, currently providing an incremental production uplift of c. 200 bopd (gross)

o  Continue to focus on maximising export volumes.

· Licence 67

o  C-4 well at the Cheremshanskoye field continues to exhibit sustained and stable production.

o  Drilling preparations continue but at a reduced pace.

Extension for Financial Reporting Deadline

Due to the continued impact of Covid, the company has been granted an extension of up to three months  for the reporting and filing of its financial results for the year ended 31st December 2021, such that it will publish these results as soon as possible, but by no later than 30th September 2022

.

Company Financial and  Operation  Metrics.

Whilst the ongoing geopolitical situation is causing disruptions, to date the  financial  and operational  performance of the Company's assets and business remain broadly in line with expectations.

Key Financial Metrics

				31 May 2022	31 Dec 2021	31 Dec 2020
				USD	USD	USD
				Un-Audited	Un-Audited	Audited
Cash and Cash Equivalents -PetroNeft				221,706	739,781	101,028
Cash and Cash Equivalents -WorldAce Investments Ltd*				3,088,343	185,274	212,437
Interest bearing Loans and Borrowings-PetroNeft				5,227,000	6,516,484	4,151,391
* WorldAce Investment Limited is PetroNeft's 50/50 Joint Venture, with Oil India International B.V.

Key Operational Metrics

Production - Barrels (gross)
Licence	To 31 May 2022	To 31 May 2021	Percentage change	FY 2021 Gross production	FY 2020 Gross production	Percentage change
	Un-Audited	Audited		Un-Audited	Audited
61	250,383	264,744	-5%	603,655	570,510	6%
67	35,328	27,177	30%	89,014	1,200	7,318%
Total	285,710	291,921	-2%	692,669	571,710	21%
Average USD Price per Barrel
Licence	To 31 May 2022	To 31 May 2021	Percentage change	FY 2021	FY 2020	Percentage change
	Un-Audited	Audited		Un-Audited	Audited
61	$74.0	$43.5	70%	$50.9	$28.2	80%
67	$62.8	$42.8	47%	$52.1	$31.2	67%

Licence 61

Current production is +/- 2,000 bopd (gross), with the Lineynoye field producing about 1,000 bopd, and Arbuzovskoye and Sibkrayevskoye fields each producing about 500 bopd. We are working to maximise export volumes which allow for larger net margins, due to lower domestic demand and prices.

A six well reservoir stimulation campaign was completed safely on schedule and within budget. The program was focused mainly on the Lineynoye field where a total of five wells were fracced. Post frac incremental production is currently approximately  200 bopd, which represents a circa  35% uplift. Three out of the five wells fracced (L-112, L-114 and L-116) experienced significant increases in production, exceeding expectations.

We had planned to stimulate six wells in total on the Lineynoye field; however, when the work-over crew commenced preparing the L-7 well, it was decided for operational reasons to avoid risking capital and spending undue time rectifying the well-bore conditions for stimulation. The well was re-perforated instead and is now producing at  stable flow rates.

The sixth well to be stimulated on Licence 61 was the A-1 well at the Arbuzovskoye field. This well had been shut in at the end of 2020 due to near well bore reservoir damage. The well had been re-perforated multiple times without much success; and the only remaining operational option was to try and stimulate the well to see if it could be brought back into commercial production. Since this operation the well has been producing at low rates post stimulation (approx 10 bopd). We intend to monitor the well closely before making a decision later in the year on our forward plans.

In addition to the above campaign, the Tungolskoye T-501 well was perforated in the horizontal interval 3730 - 3780m in an attempt to try and establish commercial production from the J1-2 interval.  Post perforation, an Electrical Submersive Pump (ESP) was run and oil rates of 20 to 40 bopd were observed with high water cuts.  In total 384 barrels of oil were recovered. Unfortunately, those oil rates are not economically viable so we have decided to shut the field in again whilst we evaluate additional data.  

Licence 67

The Cheremshanskoye field continues to produce through the C-4 well at +/-265 bopd with no water and no significant decline. The well has already produced in excess of 120,000 barrels of oil. In addition to providing a consistent revenue stream, the stable and robust producton history is providing valuable reservoir performance data, confiming our view of the significant potential of this field.

Preparations for the Cheremshanskoye development drilling program are ongoing, but at a more cautious rate due to the ongoing external environment.

For further information, contact:

David Sturt, CEO, PetroNeft Resources plc	[phone]
Brian Garrahy/Ciara O'Mongain, Davy (NOMAD, Euronext Growth Adviser and Broker)	[phone]
Paul O' Kane - Murray Consultants	[phone]

 

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