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Petroneft back drilling with USD45m cash

Tuesday, August 19 12:39:17

Irish-based, Siberian-focused oil exploration group, Petroneft, is back drilling again after a USD45m investment.

It said its joint venture working group, made up of Oil India and PetroNeft, has been formally established and that the major work programme and budget items for 2014 and 2015 have also been agreed.

A drilling crew is mobilised to begin drilling of Tungolskoye No.5 well within the next week, while a second drilling crew to re-commence production drilling at Arbuzovskoye will be mobilised shortly, according to the statement. The Sibkrayevskoye No.373 delineation well will follow the Tungolskoye No.5 well, said the company.

In addition, a seismic acquisition crew has already mobilised to commence operations for the acquisition of 1,000 kilometres of high resolution 2D seismic in the first quarter of 2015.

"The initial meetings of the joint venture working group were extremely productive and we look forward to working closely with our new partner Oil India and to realising the full potential of this asset and to developing further opportunities together," Chief Executive Dennis Francis said in a statement.

"We have a planned multi-well drilling programme. The initial well in the programme is the Tungolskoye No. 5 well. We are also commencing a major seismic programme which will shape the future direction of our drilling activity," Mr Francis added.

In an analysts' note this morning, Davy said that: " Allowing for the reduction of its equity interest in Licence 61 and for the 50pc share of the work programme, we value the group post-deal at 11.3p per share".

It added that the $45m commitment by India Oil ensures that up to two years of activity is financed at the gross level.

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