Volga Gas PLC Drilling update (1708S)
December 19 2016 - 1:00AM
UK Regulatory
TIDMVGAS
RNS Number : 1708S
Volga Gas PLC
19 December 2016
19 December 2016
Volga Gas plc
("Volga Gas", the "Company" or the "Group")
Drilling update - Uzen #4 sidetrack
Volga Gas plc, the oil and gas exploration and production group
operating in the Volga Region of Russia, announces the following
update on its drilling activities on a sidetrack to the Uzen #4 oil
well.
Volga Gas has been drilling a sidetrack to its Uzen #4 oil well
with the intention of accessing a potentially unproduced zone of
the Aptian reservoir of the Uzen oil field, which is the reservoir
that has been developed and produced to date. The quantity of
additional reserves in the Aptian is likely to be modest, but would
provide profitable additional production. Should the anticipated
Aptian oil not be present in economic volumes, the plan would be to
use the same borehole to drill a horizontal well in the shallower
Albian reservoir. Drilling to date confirms that there is a
sufficiently thick oil leg in the Albian, consistent with
management's estimate of 1.5 million barrels of oil reserves
recoverable from a horizontal well. In the case of success with the
sidetrack in the Aptian, a new horizontal well is to be drilled
from a surface location close to Uzen#4.
However, during the drilling of a deviated section from the
existing vertical well mechanical difficulties were encountered.
The drill bit and certain directional drilling tools supplied by
Schlumberger became stuck in the well, as a result of a faulty pump
interrupting drilling mud circulation.
Various attempts have been made to release the stuck drill bit
and to retrieve the directional drilling tools but unfortunately
they have proved unsuccessful. Consequently management have taken
the decision to abandon any further attempts. Given the
attractiveness of accessing incremental reserves in a side track
well, Volga Gas will recommence drilling a sidetrack after
appointing a new drilling contractor.
Volga Gas may, however, incur costs of up to US$2.0 million
including compensation for replacement of the directional drilling
tools belonging to Schlumberger. Volga Gas will seek to recover
such costs from the drilling contractor which the Company considers
to have been responsible for the problems. However, it may be
prudent to make a provision for some or all of these costs in the
2016 Income Statement.
For further information, please contact:
Volga Gas plc
+7 (903) 385
9889
Andrey Zozulya, Chief Executive +7 (905) 381
Officer 4377
Vadim Son, Chief Financial Officer +44 (0)7824
Tony Alves, Investor Relations Consultant 884 342
+44 (0)20 3470
S.P. Angel Corporate Finance LLP 0470
Richard Redmayne, Richard Morrison,
Soltan Tagiev
+44 (0)20 3727
FTI Consulting 1000
Edward Westropp, Alex Beagley
Editors' notes:
The information contained in this announcement has been reviewed
and verified by Mr. Andrey Zozulya, Chief Executive Officer of
Volga Gas plc, for the purposes of the Guidance Note for Mining,
Oil and Gas companies issued by the London Stock Exchange in June
2009. Mr. Andrey Zozulya holds a degree in Geophysics and
Engineering from the Groznensky Oil & Gas Institute and is a
member of the Society of Petroleum Engineers.
This announcement contains inside information as defined in EU
Regulation No. 596/2014 and is in accordance with the Company's
obligations under Article 17 of that Regulation.
This information is provided by RNS
The company news service from the London Stock Exchange
END
DRLGGGBCPUPQPUR
(END) Dow Jones Newswires
December 19, 2016 02:00 ET (07:00 GMT)
Volga Gas (LSE:VGAS)
Historical Stock Chart
From Apr 2024 to May 2024
Volga Gas (LSE:VGAS)
Historical Stock Chart
From May 2023 to May 2024