PetroNeft mulls sale of Russian oil licence

By Geoff Percival

Irish oil and gas explorer PetroNeft Resources is considering selling one of its two Russian-based licensing blocks as it looks to firm up long-term financing.

The Dublin-based company is solely focused, via two licensing blocks, on the Tomsk region of Siberia.

It is in “advanced discussions” with unnamed third parties over the provision of additional funding, with basic terms agreed and a completion of the transaction due before the end of September.

That money would go some way to providing longer-term funding, but will also be used to pay off a $2m (€1.7m) loan from Swedish oil producer Petrogrand, which has covered recent funding.

That loan is repayable by the end of this year.

PetroNeft said it is also pursuing “other options such as the sale or farm-out of Licence 67” to create longer-term funding, adding it is confident of bridging its current funding gap.

PetroNeft said gross production, last year, hit 816,476 barrels of oil — an average of 2,237 barrels per day. That was down on the previous year but ahead of company expectations.

The vast majority of that production came from its Licence 61 block, with Licence 67 far less developed.

The Petrogrand loan will also fund PetroNeft’s planned drill at its fourth well at the Cheremshanskoye field, which lies within Licence 67 and which “could significantly influence the future of the company,” according to management.

The company’s revenues fell 25% to $1.71m, although full-year losses shrank from $5.43m to $3.24m.

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