India Oil buys half of PetroNeft prime asset

Dublin-based exploration firm PetroNeft Resources has reported a 12% increase in annual revenues, with production levels rising 8% during 2013.

However, the firm — whose operational focus is on the Tomsk region of Russia — ultimately made a net loss of $9m (€6.6m) last year, which was driven by a €4.4m foreign exchange loss on intra-group loans.

All in all, however, 2013 has been hailed — by management — as a turnaround year for the company; culminating in the recent long-awaited farm-out agreement of high potential asset, Licence 61 in the Arbuzovskoye field. Asian exploration giant, Oil India is buying a 50% share in the licence for a total consideration of €62.3m; which includes an upfront payment of €25m.

The deal will leave PetroNeft debt free and enable it to fund its upcoming major drilling campaign in the region. The Irish firm will remain as operator of the Licence 61 asset.

“The main focus in 2013 was the work to find a long-term funding solution for the company, which culminated in the agreement signed with Oil India in April,” according to chief executive, Dennis Francis.

He added that drilling, at Licence 61, will recommence during the summer months.

PetroNeft’s total revenues, for last year, amounted to €28.2m, with production levels up to 870,965 barrels of oil.