PetroNeft upbeat on production at Cheremshanskoye

The AIM-traded firm said the well had shown virtually no decline since the start of production, with the choke size recently increased to 10mm, and the rate increased to 320 barrels of oil per day.

Workover operations on the L-2a well at the Ledovoye field, also at Block 67, had been carried out successfully, the company added.

That produced an oil flow through a perforated liner, which should enable PetroNeft to book Russian state reserves, leading to the creation of development options for the field.

“The production from the Cheremshanskoye field is extremely encouraging, and clearly demonstrates the quality and potential of this asset,” said chief executive officer David Sturt.

“It is satisfying to now have a cased hole test at the Ledovoye field.

“This successful re-entry crucially enables us to be able to seek State Reserves Committee (GKZ) approval - a major necessary milestone before we can progress development of the field.”

Sturt said licence 67 was continuing to deliver, following PetroNeft’s successful acquisition of an additional 40% interest, taking it to 90% from 50%.

“The strong operational performance, combined with the improving oil price, has significantly improved the finances of the company, which has enabled us to fund construction of the road and re-entry of the Ledovoye L-2a well without the need to call down agreed financing arrangements which now remain in place should we need the capital in the future.

“While we remain at the early stages of rebuilding, this achievement is a tangible demonstration of our improved financial position over the last 12 months.

“This progress has been based on a laser-like focus on reducing costs and harnessing local expertise to maximise the return from our assets.”

At 1412 BST, shares in PetroNeft Resources were down 0.79% at 2.83p.