TIDMUEN
RNS Number : 0651S
Urals Energy Public Company Limited
15 March 2016
Press Release 15 March 2016
Urals Energy PCL
("Urals Energy", the "Company" or the "Group")
Operational update
Urals Energy PCL (AIM:UEN), the independent exploration and
production company with operations in Russia, is pleased to provide
an operational update:
Production data for 2015
Total production by the Group during 2015 increased by 2.0% and
reached 675,318 barrels. This was made up as follows:
-- production at Arcticneft reached 253,592 barrels (2014: 240,865 barrels);
and
-- production at Petrosakh reached 421,726 barrels (2014: 421,350 barrels).
Petrosakh
Daily production update
Current daily production at Petrosakh is 1,350 barrels of oil
per day ("BOPD"), which is 230 BOPD more than the same period in
2015.
Well 109
Drilling of Well 109 to a depth of 1,842 meters has been
completed. At a depth of 1,700 to 1,842 meters, the Well
encountered the Pileng formation which is typically an
oil-saturated zone. However, during the Well completion (performed
via gas injection), the Well flowed high pressured water which may
be preventing the flow of oil to the surface.
The Well is still being tested and the team is carrying out
downhole logging in order to define the fluid movement profile and
its fractional composition. The objective is to determine whether
the flow of water can be reduced, and allow oil to flow to the
surface. Further announcements will be made as soon as the testing
of Well 109 is completed.
The area where Well 109 is situated has a complex geology and
the Company has engaged Prokon, a geotechnical analysis company who
will be responsible for monitoring the field's development. Prokon
will review the data and advise the Company on whether it should
deploy a micro seismic survey and undertake further studies of the
area, as well as reviewing Urals Energy's plan for two further
potential wells this year.
Refinery
Weather conditions in recent months have been adverse on
Petrosakh Island, which has led to increased demand resulting in
the Company seeing good sales volumes at satisfactory prices. The
new refinery control system is proving very effective in optimising
production.
Arcticneft
Current daily production
Current daily production at Arcticneft is 680 BOPD which is in
line with the same period of 2015. Recent work overs have proven
effective and the Company plans to work over a further two wells
this year, which should enable production levels to be maintained.
The Company is expecting to ship the annual cargo in July/August,
the same as last year.
Recent acquisitions
RK-Oil Limited
This year the Company plans just one workover on the RK-Oil
license, the acquisition of which was announced on 19 November
2015. The objective is to establish reserves to be registered with
the Russian State Authorities. Urals Energy will then prepare a
development plan which will incorporate development of the license
(which is in Russia's Komi region) on a coordinated and integrated
basis with the registered reserves of the license area held by our
other recent acquisition, BVN Oil Limited.
Competent Person's report
As indicated in the Company's announcements of 7 October 2015
and 19 November 2015, the Company plans to have a review of the
licenses held by RK-Oil Limited and BVN Oil Limited undertaken, in
addition to the extension of the license area at Arcticneft, in
accordance with an appropriate Standard (in accordance with the AIM
Guidance Note for Mining, Oil and Gas Companies) in an updated
Competent Person's report to be undertaken later this year. This
may also be incorporated into the Group's overall development plan
for its existing license areas, as part of an update of the
Company's reserves.
Acquisition opportunities
The Company continues to look at various M&A opportunities.
The Company has engaged Proxima Capital Group, a Moscow advisory
firm, to assist in the search on a selective basis.
Andrew Shrager, Chairman, commented: "While the oil price seems
to be recovering somewhat and the Rouble exchange rate remains
favourable, we have decided to keep capex spending limited,
particularly in terms of drilling expenses which require
consumables sourced in US dollars. At current prices for crude and
domestic sales, given the Rouble exchange rate and the current tax
regime, the Company is able to operate on a broadly cash neutral
basis, including funding our limited drilling programme."
The section of this release with respect to Well 109 has been
approved by Mr Vasily Nikoluk, Chief Geologist, a graduate of the
Ivano Frankivsk University, the former head of department at
Gazpromneft and a qualified person, in accordance with the guidance
note for Mining, Oil & Gas Companies, issued by the London
Stock exchange in respect of AIM companies, which outlines
standards for disclosure for oil companies.
- Ends -
For further information, please contact:
Urals Energy Public Company
Limited
Andrew Shrager, Chairman Tel: +7 495 795
0300
Leonid Dyachenko, Interim www.uralsenergy.com
Chief Executive Officer
Allenby Capital Limited
Nominated Adviser and Broker
Nick Naylor / Alex Brearley Tel: +44 (0) 20
/ Liz Kirchner 3328 5656
www.allenbycapital.com
Media enquiries:
Abchurch
Philip Dennis / Quincy Allan Tel: +44 (0) 20 7398 7710
quincy.allan@abchurch-group.com www.abchurch-group.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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