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PetroNeft Resources plc provides operations update

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Oilfield Technology,

PetroNeft has provided an update on operations at Licence 61.

Tungolskoye Development

The T-501 well at Tungolskoye was completed at a depth of approximately -2500 m TVD with a horizontal segment of 997 m in the Upper Jurassic horizon of which approximately 590 m is in effective net pay. The log data suggests that the oil pay is of better quality than that encountered in earlier wells. After the well was brought online the pressure depleted quickly and the well could not sustain continuous production. It is thought that this was due to some formation damage in the horizontal section caused during the drilling process.

The well is expected to be similar to if not better than the T-503 and T-502 horizontal wells, which achieved initial flow rates of close to 500 bopd. An acid bath was conducted on the horizontal segment to further eliminate potential formation damage. The well is cleaning up following this second workover and will take a few weeks to reach a stabilised rate.

The T-505 well at Tungolskoye has been completed at a depth of approximately -2508 m TVD with a horizontal segment of 466 m in the Upper Jurassic horizon of which approximately 265 m is effective net pay. When the well was brought online we experienced similar flow problems to the T-501 well. The well is currently being worked over to clean the horizontal section and flush the well bore, with stabilised production anticipated in January 2016.

The T-509 vertical injection well has also been drilled. The top of the J1-1 reservoir was penetrated a depth of -2,517 m TVD. The well is interpreted to have about 8.1 m of oil + water pay in the J1-1 and J1-2 intervals. We plan to test these intervals to see if they will flow oil before making the decision to convert the well to the water injector planned to provide pressure support for the T-505 and T-501 horizontal wells.

The drilling programme at Tungolskoye is now complete.

Arbuzovskoye development

Production from the new wells drilled at Arbuzovskoye in 2015 and has declined more than expected, perhaps due to migration of fine particles within the reservoir, partially plugging the perforations near the well bore.

The size of the southern portion of the Arbuzovskoye field has increased significantly based on the new well and seismic data acquired earlier this year. Internal calculations indicate that the current 2P reserves of 6.54 million bbls for Arbuzovskoye are likely to increase by more than 50% to over 10 million bbls with the yearend reserves audit.

PetroNeft is now planning the development of the southern portion of the field, which will include a new pad with 4 km pipeline and utility line tie in to Pad 1, as well as up to three horizontal wells and one vertical well for the development. The well pad is currently under construction.


Current gross production at Licence 61 is about 2500 bopd. While an over 40% production uplift in 2015 to date, it is below the company’s expectations because of the delays in bringing the Tungolskoye T-501 and T-505 wells into production and the greater than expected declines from the Arbuzovskoye wells drilled earlier this year. As such, the company is implementing workover programmes designed to address these issues and expects to see production begin to improve shortly.

Dennis Francis, Chief Executive Officer of PetroNeft Resources plc, commented: "We are generally pleased with our ability to drill horizontal wells at Tungolskoye which will be a key element of optimising recovery of existing reserves and successful execution of new developments in Licence 61. While the initial results of the last two horizontal wells have been disappointing, we believe the results can be improved at minimal costs with the planned workovers and acid treatment of the reservoir. We are now preparing for the development of South Arbuzovskoye next year with construction of Pad 2 from where we expect better flow rates from the horizontal wells and good economics, even at the current low oil prices. Production has increased by over 40% in 2015 and we will continue to focus on production growth."

Edited from press release by

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