Petroneft looks for acquisitions

IRISH oil and gas exploration company Petroneft Resources is actively looking at potential acquisition opportunities in its core geographical market of Siberia in central Russia.

Petroneft looks for acquisitions

The AIM and IEX-listed company owns two licences in the Tomsk province and just last week announced the signing of a new $5 million (€3.7m) debt facility with investment bank Macquarie, which will basically fund the exploration activity it has planned for the second half of this year.

The company — which has a production target of 4,000 barrels of oil per day (bopd) in place for this year — also announced, last week, that it is in advanced negotiations with “a number of international banks” (including Macquarie) over the provision of an even larger debt facility over the coming months.

The firm’s plan is to commence exploration work on at least three wells in the fourth quarter of this year.

Petroneft is also likely to be active regarding overall expansion plans, before the end of 2010. This is likely to result in the company taking part in the bidding process for any new licences in the region that come up, with at least one new licence auction expected.

The Dublin-headquartered company could also be involved in the ongoing consolidation in the oil market in that part of the world, most probably via hoovering up relatively small-scale local players in need of capital assistance and availing of their management’s local knowledge and expertise.

Petroneft bought its second Tomsk licence last December (it also owns the nearby Licence 61, where this year’s aforementioned drilling activity — and additional drilling in 2011 — will take place) for $1.4m, with Russian-focused oil company Arawak Energy exercising its option to acquire a 50% stake in the asset in January.

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