Petroneft says it is on course in Siberia

PETRONEFT, THE Irish explorer with interests in western Siberia, says it is on schedule to begin production from its wells in the region next year.

The board recently approved the development of its Linoynoye and West Linoynoye oil fields. The group said in an interim statement yesterday that most of the 62km of pipe needed to export the crude has been delivered.

"The group remains on course to begin year-round production in 2009," according to Petroneft's statement.

Exploratory drilling has encountered a potential new resource in its West Korchegskaya field in western Siberia and it intends to carry out further work there next year.

In July it raised $17.3 million from institutional and private investors, including its directors. It has also agreed a loan facility of up to $80 million with Standard Bank.

The fundraising and loan agreement allowed have paved the way for the Linoynoye development to go ahead.

Davy Research yesterday estimated that Petroneft's reserves stand at 60.6 million barrels of crude. It set a target price of 76 pence for the stock.

The shares closed in London last night at 14.5 pence.

The company reported that it lost €1.4 million in the first six months of the year.

Equity attributable to shareholders on June 30th stood at $42.7 million, up from €27.1 million a year earlier.