Petroneft surges on output boost from Siberian wells
SHARES in the exploration company Petroneft surged yesterday after the company said oil had flowed at a much greater rate than had been expected at a number of its wells in Siberia.
The Russian-focused driller said the first two wells it had drilled as part of a 10-well programme in the Arbuzovskoye oil field had achieved a combined flow rate if 840 barrels of oil per day. The second well on its own had flowed at a rate of 540 BOPD. That is the highest flow rate recorded on the field without using the fracking technique.
Petroneft had been forecasting a total flow rate of 1,000 BOPD for the 10 wells it is planning to drill.
That is now likely to be achieved after only two wells have been opened up.
The announcement was a welcome bit of good news for Petroneft, which has been hit by lower-than-expected production rates this year because of problems with one of its two licences in Siberia.
The wells produce free cash flow of around $8.5m (€6.1m) for every 1,000 barrels produced.
Company chief executive Dennis Francis was "delighted" with an "outstanding production rate from well 102".
"This is well above our target rate for these wells and further confirms the excellent continuity and good reservoir properties in the eastern portion of the field.
"While there may be some variation in results, we look forward to the additional wells over the coming months as we continue to focus on materially increasing our production profile and cash flows," he said.
Meanwhile, John Teeling's Botswana Diamonds said it had identified five targets on its new licence in the Orapa region of Botswana.
Mr Teeling commented: "These are very encouraging results which enable us to move forward to the next stage of exploration activity with confidence."
Petroneft gained 14.6pc in London to close at 6.8 pence. In Dublin it added 12.5pc to close at 9c. Botswana Diamonds, which is listed on London's AIM market, added 13.6pc.