Irish explorer PetroNeft mulls sale of Russian assets

Irish exploration company PetroNeft Resources is looking at all options - including the sale of its chief assets - in a bid to return value for its shareholders.

The company said M&A activity in the Russian market, where it is solely focused, has picked up and that it is open to any activity, either as a buyer or a seller. PetroNeft said its current share price - down around 20% in the year to date at around 1p - does not accurately value its assets.

The most likely outcome would seem to be a partial or full sale of its stakes in two licences in the Tomsk region of Siberia, one of which delivered positive drilling results towards the end of last year. Expressions of interest from companies have already been shown.

"This process is ongoing and I am very pleased with the level of interest and the calibre of companies that we are currently talking to," said PetroNeft's new chief executive David Sturt.

"Over the past 12 months the asset acquisition market in Russia has seen increased activity, especially for the larger domestic companies. This gives us reason for optimism about a positive outcome," Mr Sturt said.

"Although the company is facing some challenges, I believe there is clearly very significant potential and value in the company's assets that we will seek to exploit," he said.

Mr Sturt said PetroNeft's board is focused on examining all options to increase shareholder value.

"This includes the potential sale of all or part of existing licences. It could also include licence acquisitions where we see upside. We are working tirelessly to identify and execute the best options in the market," he said.

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