PetroNeft Raises Funds for Russian Field Development

Russia-focused PetroNeft Resources announced Monday that it has raised $6.7 million in a share placing. Part of the proceeds will be used to fund the delivery of supplies and equipment to its onshore field located at License 61 in the Tomsk Oblast, Russian Federation.

PetroNeft also said that its farm out of License 61 to an unnamed large international oil and gas company is progressing well, with completion expected during the next few weeks.

The proposed deal is structured to enable PetroNeft to repay all of its debts (Macquarie and Arawak), have cash for working capital purposes and significant funds available to invest directly in Licence 61 over the coming years. The firm said it will also bring an internationally recognised, financially strong partner with a strong technical team and wide ranging experience around the globe in various hydrocarbon plays.

The firm's production is currently at 2,400 barrels of oil per day, following the successful completion of some workers. PetroNeft said its water-injection program continues to function effectively and overall well performance is in accordance with its expectations.

PetroNeft CEO Dennis Francis commented in a company statement:

"We are pleased with the fundraising which will allow us to purchase and transport materials to the field this winter to conduct a full scope of work in 2014 following completion of the farm out.

"We have also made significant progress on the farmout in the past month and anticipate that it will be completed at the end of the first quarter or shortly thereafter."


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