PetroNeft sees ‘encouraging’ production from Russian field

Irish oil and gas exploration company PetroNeft said it has seen “encouraging” production from the Cheremshanskoye field, providing it with strong operational cash flows.

In an update to the market, the company, which operates in the Tomsk Oblast in Russia, said the well has shown virtually no decline since the start of production.

The field came on stream at the end of February, producing more than 27,000 bbls through May, with production last month of more than 9,000 bbls.

"The production from the Cheremshanskoye field is extremely encouraging, and clearly demonstrates the quality and potential of this asset," said PetroNeft chief executive David Sturt. "It is satisfying to now have a cased hole test at the Ledovoye field. This successful re-entry crucially enables us to be able to seek State Reserves Committee (GKZ) approval – a major necessary milestone before we can progress development of the field."

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That has also contributed to the company being able to fund construction of the road and re-entry of its Ledovoye L-2a well without the need to call down agreed financing arrangements. Those arrangements remain in place for the future.

“While we remain at the early stages of rebuilding, this achievement is a tangible demonstration of our improved financial position over the last 12 months,” Mr Sturt said. “This progress has been based on a laser-like focus on reducing costs and harnessing local expertise to maximise the return from our assets. This approach will continue in the months ahead.”

PetroNeft is 90 per cent owner and operator of Licence 67, following the increase of its stake from 50 per cent, and is 50 per cent owner and operator of Licence 61.