Petroneft in talks over licence stake

Irish exploration company Petroneft Resources has entered talks with interested parties regarding the farm-out of an equity stake in one of its producing licences in the Russian region of Tomsk.

The Dublin-headquartered company — which holds two licences in Tomsk — has seen its share price in London jump by nearly 5% on the back of announcing the successful drilling of the first of 10 wells at its Arbuzovskoye field.

Production from the Arbuzovskoye and Linenoye fields is remaining steady at 2,000 barrels of oil per day and first new production at the former is expected by the end of this month.

Addressing shareholders at its AGM on Wednesday, Petroneft chief executive Dennis Francis said production levels from the Arbuzovskoye-1 well “bodes well for future production at the field and for our future cash flows”.

Arbuzovskoye is one of five fields in Petroceltic’s Licence 61 asset in the region, which is being primed for farm-down.

The company owns 100% of thelicence and is considering selling a chunk of that ownership to lower its developmental costs.

“We have initiated discussions with a range of strategic investors about possible farm-outs, long-term off-take agreements and potential equity or asset investments, which — in the long-term — would strengthen the group’s financial position,” Mr Francis said.

“Positioning the group well,financially, in the years ahead such that it can fully exploit the many opportunities available to it is of crucial importance.!”

Meanwhile, Petrel Resources — the John Teeling-chaired oil and gas explorer — has given a positiveupdate on its licences which are located off the west coast of Ireland, saying it, too, is looking to bring on developmental partners in thePorcupine Basin area.

Managing director David Horgan said: “Our objective is to develop targets that will attract large partners, to facilitate an early seismic campaign, followed by exploration wells.”