PetroNeft Resources: Operational Update

PetroNeft an oil and gas exploration and production company, operating in the Tomsk Oblast, Russian Federation and 90% owner and operator of Licence 67 and 50% owner and operator of Licence 61 is pleased to announce the following operational news.

Highlights

Following the success of our fracking program in early 2021, PetroNeft is pleased to announce it is extending the campaign for winter 2021/22 with the goal of increasing production and also improving the sustained flow rate of existing wells  over two producing fields in licence 61.

During Q1 2021, a two well fracking program was successfully completed on wells S-373 (Sibkrayevskoye field) and L-115 (Lineynoye field). Both were highly successful and exceeded expectations with immediate post frack production rates increasing over 200% and have leveled off at an increased rate of between 50%-100% and currently projected to make a full return on investment before the end of the year, well ahead of schedule.

Following this successful initial program, a new contract was signed with NewTech Well Services LLC, an international oilfield services company, for the provision of a larger fracking program covering an additional five wells. The contract has been secured at the same terms as earlier in the year, ensuring a strong return on additional production.

The program includes the fracking of four wells at the Lineynoye field and one well at the Arbuzovskoye field. Other contingent candidates are still being evaluated and should they meet the technical, operational and economic criteria they may be added to the program.

At the Lineynoye field the target is to refrac four wells to boost overall production and cash flow. At the Arbuzovskoye field, the A-1 well has been suffering from near well bore reservoir damage. Historically the well has been re-perforated multiple times and although these programs have been successful in reestablishing production, the rates have progressively declined. The planned frack has therefore been designed to remove near well bore damage and reach out into some potential areas of the reservoir that have not been drained adequately.

Operational update

David Sturt, CEO PetroNeft commented:

“The two well fracking program in early 2021, which was based on extensive technical planning by our team, was a fantastic success. The program performed beyond our expectations and will have delivered a full return on investment in under a year. Based on this, our team has developed a more ambitious 5-well program for the coming winter. We are delighted to be working again with NewTech, following the successful engagement earlier in the year.

After considerable technical review, we took a careful and measured approach to our two well fracking program earlier this year to ensure that our assumptions were correct. It is now very satisfying to be able to extend the program this year to another five wells and further boost production on our licence 61 asset. We will continue to work closely with all the relevant stakeholders to ensure we operate in a safe and environmentally responsive manner, through full execution of this program

This is the first part of our 2022 operational program to be announced and we look forward to providing further updates over the coming weeks as we look to build on the progress made to date”