The Norwegian oil company Vega Resources is seeking to raise a total of US $30-50 million to fund exploration and operations at three licenses in the Rostov region of Russia. Third party assessments conducted by PGS Russia & CIS/PGS Reservoir UK indicate potential resources up to 9 billion barrels of oil equivalents (unrisked).
"The proceeds will be allocated to more 2D and 3D seismic studies, to start the drilling program on our three licenses, and to further develop the organization in Norway and Russia," said Bjorn Ursin-Holm , CEO of Vega Resources AS. "We have a drilling commitment of 3 deep wells. and the first drilling operation will take place towards the end of the year."
Russia-based Renaissance Capital has been brought in as financial advisor to raise capital. Vega Resources would also consider strategic partnerships with competent E&P companies and investors with a long term focus on Russia to develop such an exciting project, Ursin-Holm added.
The licenses in the Rostov region are located in an area that is surrounded by oil producing fields, but has not previously been drilled in. Two of the licenses border on the river Don and the area has a very well developed network of oil and gas pipelines. The three licenses are situated in the Karpinsky Ridge. The total acreage of the licenses awarded in January 2006 is 4000 square kilometers, and so far the company has conducted 425 km of new 2D seismic.
The company is well underway with the second seismic program and will be drilling their first well at the end of 2008.
"We have just started our second round of seismic surveys comprising some 300 kilometers of new 2D seismic around our possible first drilling target," said Ursin¬-Holm. "While this area of the Karpinsky Ridge has never been drilled before, both the seismic studies and the adjacent oil producing field indicate a strong likelihood of encountering hydrocarbons." The nearby Don Bass coal basin has generated between 13-15 Trillion Cubic meters of methane gas.
The nearest fields in production are located only 30 km from the Vega Resources blocks.
The company is in the process of raising USD 10 million at highly favorable terms, and will later this summer will undertake a private placement directed at Norwegian and International investors to raise an additional USD 20-40 million," said Ursin-Holm. "The managers will be Renaissance Capital. "We have an ambitious program - to drill our first well toward the end of 2008, and aim to become the leading Nordic E&P company focused on Russia. In addition we will continue with our seismic surveys and our other exploration activities."
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