TIDMZOL
RNS Number : 2723W
Zoltav Resources Inc
16 April 2019
16 April 2019
Zoltav Resources Inc.
("Zoltav" or the "Company")
Operations Update
Zoltav (AIM: ZOL), the Russia-focused oil and gas exploration
and production company, is pleased to provide an update on strategy
and operations at the Bortovoy Licence, Saratov.
Western Gas Plant
The Western Gas Plant continued to be operated efficiently
throughout 2018 with only one, scheduled, 48-hour maintenance
shutdown. Average net daily production (sold to customers) through
the Western Gas Plant in 2018 was 33 mmcf/d (0.94 mmcm/d) of gas
(2017: 40.4 mmcf/d or 1.15 mmcm/d) and 301 bbls/d (38 t/d) of oil
and condensate (2017: 337 bbls/d or 43 t/d). The natural production
decline from existing well stock continued at a slower rate than
predicted, primarily due to Zhdanovskoye Well 8 remaining on
production throughout 2018 and the well head compressor having been
put into operation on the Karpenskoye field.
In line with its strategy to reverse production decline,
management has approved the drilling of the first two sidetracks on
existing well stock (each with a 500 m horizontal ending) on the
Zhdanovskoye field. A rig tendering process is at an advanced
stage, with the first well (Zhdanovskoye Well 103) anticipated to
be spud in Q2 2019. Both wells are expected to be put on production
before year-end, adding an estimated 11 mmcf/d (0.3 mmcm/d) of gas
and a 3% increase to daily condensate production. Further wells, on
the Zhdanovskoye and Karpenskoye fields, are slated for
approval.
Exploration Programme
Interpretation of the 341 sq km of 3D seismic data acquired in
2017-2018 over the Carbonian and Devonian (and also prospective
Permian) structures in the Mokrousovskoye block has identified a
prospective gas field in the Devonian structure and a prospective
gas field in the Permian structure; both of which will require
exploratory drilling. Management's estimates of prospective
resources within the identified fields is subject to ongoing work
and will be communicated in due course.
In light of the ongoing review of the full range of commercial
opportunities on the Bortovoy Licence, the geotechnical team, led
by Yuri Krasnevsky, Director for Geology and Field Development, has
concluded that the Company should focus in the near-term on
commercialising existing low risk reserves (under the Russian
classification system) in both the western and eastern fields of
the Bortovoy Licence, before proceeding with further exploratory
drilling on the new prospective fields. The final results of the 3D
seismic interpretation will be included in the mid- to long -term
exploration programme, which is under development and will be
communicated in due course.
East Bortovoy
Progress continues to be made towards commercialising the
substantial reserves in the eastern fields of the Bortovoy Licence.
Approximately 70% of the Bortovoy Licence 2P gas reserves of 750
bcf (21.2 bcm) (based on the 2014 CPR) are concentrated in the
eastern fields of the licence. Producing these existing reserves
(before taking into account the potential upside of further
exploration activities) would utilise Western Gas Plant capacity
for up to 15 years. The preferred development scenario envisages
the construction of a gas pipeline from the Western Gas Plant,
connecting the western Mokrousovskoye field, followed by the
eastern Pavlovskoye, Lipovskoye, and ultimately the easternmost,
substantial, Nepryakhinskoye, fields.
Approximately RUB 150 million (USD 2.5 million) has been
budgeted to re-enter and evaluate production rates, gas composition
and well conditions of existing Soviet wells on the Pavlovskoye,
Lipovskoye and Nepryakhinskoye fields. Data acquired will
contribute to the technical and economic feasibility study required
to address uncertainties (including cost, pipeline corridor and
parameters, and Western Gas Plant capacity extension) before making
a final investment decision. To date, the Company has re-entered
one well on the Pavlovskoye field and four wells on the Lipovskoye
field. All wells tested in line with or better than management
expectations based on Soviet flow rate data. The re-entry programme
is anticipated to be completed by the end of May 2019 and the
Company intends to update on the progress of the technical and
feasibility study prior to the end of July 2019.
Tigran Tagvoryan, Chief Executive Officer of Zoltav,
commented:
"I am pleased that previous exploration activities carried out
over the Mokrous area confirm the further exploration potential of
the Bortovoy Licence. These, and other opportunities for additional
assets, will form part of our mid- to long -term exploration
strategy. However, my near-term focus is on bringing current
reserves into production with the lowest possible risk, while
preserving opportunities for exploration upside in due course. This
development strategy naturally focuses on the east of the licence
which accounts for 70% of the substantial 2P gas reserves. Initial
results from well re-entries are encouraging and are contributing
to the detailed feasibility analysis that is ongoing. I look
forward to updating shareholders on this progress later this
year.
In the meantime, we are poised to drill the first two sidetracks
on existing well stock in the western fields as part of the
strategy to increase production from these fields. Both wells are
anticipated to be on production by year-end."
Contacts:
Zoltav Resources Inc. Tel. +44 (0)20 7390
0234
Lea Verny, Non-executive Chairman (via Vigo Communications)
SP Angel Corporate Finance LLP (Nomad Tel. +44 (0)20 3470
and Joint Broker) 0470
John Mackay / Jeff Keating / Soltan
Tagiev
Panmure Gordon (Joint Broker) Tel. +44 (0)20 7886
2500
Charles Lesser / James Stearns
Vigo Communications Tel. +44 (0)20 7390
0234
Ben Simons / Simon Woods zoltav@vigocomms.com
About Zoltav
Zoltav is an oil and gas exploration and production company
focused on Russia.
Zoltav holds the Bortovoy Licence in the Saratov region of South
Western Russia, a 3,215 sq km area along the northern margin of the
Pre-Caspian basin, one of the largest hydrocarbon basins in the
CIS.
The Bortovoy Licence contains a number of productive gas fields
in the west of the Licence, a processing plant and significant
exploration prospectivity. It holds proven plus probable reserves
under the Society of Petroleum Engineers' Petroleum Resources
Management System of 750 bcf of gas and 3.8 mmbbls of oil and
condensate. In 2018, average daily production through the Western
Gas Plant was 33 mmcf/d (0.94 mmcm/d) of gas and 301 bbls/d (38
t/d) of oil and condensate.
The Company is currently evaluating strategies to commercialise
the eastern fields of the Bortovoy Licence.
Zoltav also holds the Koltogor E&P Licence, a 528 square
kilometre area in the Khantiy-Mansisk Autonomous Okrug of Western
Siberia. Development activities on the Koltogor Licences are
currently on hold.
For further information on Zoltav or to sign up for our news
alert service visit: www.zoltav.com.
Glossary:
bcf Billion cubic feet
bcm Billion cubic metres
=================================================
bbls/d Barrels of oil per day
=================================================
Category D0 Prepared resources of Category D0 under
the Russian reserves system indicate
the potential of discovering oil and
gas deposits in a trap prepared for prospecting
drilling and are used to design prospecting
activities
=================================================
m Metres
=================================================
mmcf/d Million cubic feet per day
=================================================
mmcm/d Million cubic metres per day
=================================================
t/d Tonnes of oil per day
=================================================
2014 CPR 22 May 2014 Competent Person's Report
by DeGolyer and MacNaughton under the
Society of Petroleum Engineers' Petroleum
Resources Management System
=================================================
2P Proven and Probable Resources under the
Society of Petroleum Engineers' Petroleum
Resources Management System
=================================================
Inside Information
This announcement contains inside information as stipulated
under the market abuse regulation (EU no. 596/2014). Upon the
publication of this announcement via regulatory information service
this inside information is now considered to be in the public
domain.
Competent Person
The technical information in this release has been reviewed by
Yuri Krasnevsky, who is a qualified person for the purposes of the
AIM Guidance Note for Mining, Oil and Gas Companies. Mr Krasnevsky
is Director for Geology and Field Development at Zoltav. He has
over 30 years of experience in geological exploration and
production in Russia and holds a degree in geological engineering
and hydrogeology from Gomel State University.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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