Discovery of oil deposit boosts Petroneft shares
PETRONEFT, an Irish oil producer and explorer focused on Russia, has discovered an "important" oil deposit at its Arbuzovskaya No 1 well in the Tomsk region in Siberia.
"This is an especially important discovery," chief executive Dennis Francis said yesterday. "Because of the good flow rate it confirms the wider prospectivity of a number of additional structures east of the producing Lineynoye oil field."
Petroneft shares soared 10pc in Dublin following the news and closed up 7.8pc at 68.5c. Shares in the company have tripled this year, making them the best-performing stock on the Irish stock exchange.
The Arbuzovskaya well flowed at 289 barrels a day, producing oil with an API gravity of 40 degrees from a five-metre subsurface layer, Petroneft said. It is the first of a five-well exploration programme that aims to double the company's proved and probable reserve base next year.
"The news should be welcomed by shareholders," said Job Langbroek, an analyst with Davy Stockbrokers. "The flow rate is especially impressive given that it is from just five metres of net pay. The original target size was some 16 million barrels; while additional work is still required, the current well should provide confidence that at least up to two-thirds of this has been achieved."
Proved and probable reserves totalled 70.8 million barrels at the start of this year according to an audit, Petroneft said. It wants to boost output to 4,000 barrels of oil a day by the end of this year and to 12,000 barrels a day by the end of 2012.