# PetroNeft Resources year on year production increases at Licence 61

- Link: https://www.directorstalkinterviews.com/petroneft-resources-year-on-year-production-increases-at-licence-61/412854504
- Published: 2020-08-25T07:23:55+01:00
- Author: Giles Arbor

**PetroNeft Resources plc** (LON:PTR) an oil & gas exploration and production company,
operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of
Licences 61 and 67 has announced improved production.

**Highlights**

· Licence 61

 * Production up year on year by 7.8%, to 1,589 bbls/day July 2020, currently averaging
   17% above July 2019 levels.
 * Strong performance from the Lineynoye field with production over 20% ahead of
   July 2019 levels.
 * Sibkrayevskoye field continues to perform well with production currently averaging
   246 bbls/day.
 * Improvement in local market conditions.

Production has increased year on year at Licence 61 due to a combination of optimising
the waterflood program at the Lineynoye field and placing the Sibkrayevskoye field
into year-round production.

In 2019 the company allocated capital and resources to a low-cost data gathering
program across our fields. The first data acquired was on the Lineynoye field. This
data has improved our understanding of the field, which has enabled us to implement
improvements in the water flood program at Pad 1, during Q1 2020. We believe we 
are now seeing the positive results of these adjustments. An additional well was
converted into an injector during Q2 2020. We will continue to closely monitor the
field performance and are looking at the potential to carry out further well interventions.

The Sibkrayevskoye field continues to produce at approximately 246 bbls/day without
any material decline. The robust performance of the two wells is providing increased
confidence in the forward potential development of the field. We are currently looking
at ways to increase production further during the next winter season (2020/21) through
either hydraulic fracturing or further well re-entries. We hope to be able to update
shareholders on these plans as the year progresses and once our detailed review 
is complete.

Following our success at Lineynoye, we have now begun to focus on the Arbuzovskoye
field where over the last two years we have observed a significant decline in the
production rate at PAD 2, particularly the A-214 HZ well. Following evaluation of
the reservoir data gathered through last year, we have taken the decision to convert
one vertical well to an injector and another to a water source well during the first
quarter of this year. We are currently monitoring performance at this location and
will provide an update within the next few weeks.

The global oil price drop in March 2020, which further weakened in April, had an
immediate effect on the Russian domestic market where Petroneft sells its produced
oil. Starting from May we have seen domestic oil prices starting to recover and 
by June they had returned to near pre-crisis levels.

> **David Sturt, CEO PetroNeft Resources commented:**
> “It is extremely encouraging to be able to begin seeing the benefits of the field
> optimisation programs which started last year with extensive but low-cost data
> gathering across our well portfolio. This data led approach allows to achieve 
> greater returns from our investments. Being able to stabilze and even increase
> production without deploying significant capital to expensive drilling is particularly
> good news and demonstrates the future potential of these fields.
> Looking forward, we are planning to continue improvements which in addition to
> optimising our water floods may involve techniques such as re-fracking and well
> re-entries. We believe that these low cost initiatives can deliver real production
> benefits.”

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