Petroneft Resources sees production upside

Petroneft Resources, a Russia-focused oil company, has reported that one of its licences could double its production by the end of the first quarter of 2012.

Current field production on licence 61 is about 2,500 barrels of oil per day (bopd), which production expected to reach the guided target of 4,000 to 5,000 bopd by April.

At licence 61 the firm's pilot production design for the Arbuzovskoye oil field was approved by the Russian State Central Development Committee. The field contains probably reserves of 13.2m barrels of oil according to independent reserve auditors.

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The Cheremshanskaya well 3 on licence 67 achieved a "high quality" oil flow, which is understood to be the first natural flow ever achieved from this Lower Jurassic interval in the Tomsk Oblast.

Chief executive officer Dennis Francis said: "We are pleased that the 10-well heli-frac operation at Pad 2 on the Lineynoye oil field has been completed and that all wells brought online so far are successfully producing oil while continuing to clean-up with encouraging initial indications. This, combined with the approval of the Arbuzovskoye Pilot Production Project, will ensure the continuation of our production growth in 2012 and beyond.

"We are also delighted that testing of Cheremshanskaya has demonstrated the first natural flow of light oil ever recorded in the Lower Jurassic interval in the Tomsk Oblast. The focus of the testing programme now moves to the Upper Jurassic J1-3 interval where additional studies indicate that the interval may also be oil bearing."

The share price fell 0.57% to 21.88p by 13:44 after gaining more than 2% in earling trading.

NR