PrimeGen Energy has reported on June production for the Kochmesskoye well at Timan-Pechora, Russia. The well commenced commercial oil production on June 17, 2009, and the Company has received production results for the first 21 days. Total oil produced and sold was 25,200 barrels with an average daily production rate of 1,200 barrels per day.
The swab test analysis of the well during the completion phase indicated that the production rate should exceed the original estimate of 1,400 barrels per day. The I.P.R.s (Initial Production rates) are being evaluated and production has, over many days in the month, exceeded a rate of 1,300 barrels per day. The Kochmesskoye well is the first of a multi-well program drilled at Timan-Pechora by PrimeGen. The 2009 development program calls for the drilling of a minimum of 30 wells to develop the field. When fully developed, the 30 wells should give a daily production rate at Timan-Pechora of 35,000 barrels per day.
Robert Charlton, President, stated, "The first month production at Timan-Pechora is what we believe to be the start of a lengthy and profitable operation. As Timan-Pechora is developed, the oil reserves will become a core asset to the Company's future cash flow."
Using current pricing for Timan-Pechora crude oil, PrimeGen has now projected that the well has generated $1.6 million in revenue or $19.2 million per year and will payout its entire cost in 3 months. Currently, oil at Timan-Pechora has been priced at over $65.00 per barrel.
The Timan-Pechora Project area currently consists of 24 existing production oil wells with close to one billion barrels and 132 BCF of proven reserves. A discovery well tested 5,589 BOPD from zone at 3,958-3,974 meters. Timan-Pechora region is 17 kilometers from Ukhta, a major town in the Republic of Komi. The oil plays are situated approximately 1,200 km from Moscow. Its surrounding areas have well established infrastructure, allowing all year access for field operations. Power lines and a major highway pass through the territory. There is also a branch of the Transneft pipeline between Ukhta and Moscow that passes directly over the project. Additional transportation routes include a railway system, with the nearest terminal located close to Ukhta.
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