Irish exploration firm PetroNeft Resources cuts losses by 8%

Irish exploration firm PetroNeft Resources has reported an 8% reduction in full-year losses and said that pending drilling activity could show a material rise in reserves at its flagship asset in Siberia.

Irish exploration firm PetroNeft Resources cuts losses by 8%

The company — which recently fended off an activist shareholder challenge to its senior management and agreed a significant funding deal with joint venture partner, Oil India — yesterday reported a pre-tax loss of just under $7.7m (€6.8m) for 2015, down from $8.4m for 2014.

Gross production from its flagship Licence 61 asset amounted to 737,655 barrels of oil as of the end of last year.

The company has a fully-funded work programme planned for Licence 61 covering this year and next and further production increases are likely from drilling in the south Arbuzovskoye field within the licence.

After three weeks of production the A-214 horizontal well at south Arbuzovskoye is still producing over 850 barrels of oil per day.

A new delineation well, due to be drilled within Licence 61, is due to commence next month and holds the potential for a “material increase in reserves,” the company said.

PetroNeft recently struck a deal whereby Oil India — its development partner at Licence 61 — will cover 100% of the necessary funding to develop the asset.

The deal was conditional on the Irish firm’s current management team remaining in place.

That has been safeguarded with a deal ensuring largest shareholder, investment firm Natlata Partners, cannot vote against the board at any general meeting for two years.

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