PetroNeft to Drill First of 10 Arbuzovskoye Wells in 3Q 2012

Russia's PetroNeft Resources reported Thursday that it expects the first of up to 10 new production wells at its Arbuzovskoye field in the Tomsk Oblast in Western Siberia to come on stream in the third quarter of 2012.

The drilling rig and necessary supplies to drill these wells were moved on location during the first quarter of this year when winter roads were in place to handle the heavy roads.
The Arbuzovskoye field, on license 61, contains in excess of 13 million barrels of oil, according to PetroNeft. Arbuzovskoye is the firm's second production development.
The Lineynoye field, which is also on license 61, has seen steady in production at about 2,200 barrels of oil per day. PetroNeft said that it is pleased with the response from its Pad 1 wells to water injection and has begun water injection into one well on Pad 2, with additional wells planned in the future.
Meanwhile, further studies are underway that are designed to help PetroNeft better understand the field's Pad 2 wells – which PetroNeft reported in February had not performed as well as those in Pad 1 following fracture stimulation.
Although these studies are expected to take some time to complete, the firm said that a good initial understanding of the differences between the Lineynoye Pad 1 and the Pad 2 wells had been achieved. PetroNeft does not expect similar issues to arise at its Arbuzovskoye or Sibkrayevskoye fields.
PetroNeft also announced Thursday that it had achieved a $15 million three-year term loan with Arawak Energy, with which it has also agreed a three-year 'Area of Mutual Interest' agreement that will see the two companies pursue new opportunities in Western Siberia. Under a previous AMI, Arawak opted to take a 50-percent interest in license 67 – which was acquired by PetroNeft in January 2010.
"We are delighted to conclude a new financing arrangement and AMI agreement with Arawak Energy and look forward to continuing our fruitful partnership in the coming years. We will now focus on developing Arbuzovskoye and seek to build on our existing production profile and positive cashflows throughout the remainder of the year," said PetroNeft Chief Executive Officer Dennis Francis in a statement.


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