PetroNeft Resources begins production at Arbuzovskoye well 109

Russia-based PetroNeft Resources has successfully completed drilling of the Arbuzovskoye well 109 at its Arbuzovskoye oil field in the Tomsk Oblast, and has now begun production.

The company said the well is stabilising after facing flow line problems caused by severe cold weather, and is expecting production at an initial flow rate of 100 bopd, with no visible water cut.

Average production level from the first three wells at Arbuzovskoye has surpassed initial targets. PetroNeft said that drilling of Arbuzovskoye well 111 is underway, while group production is currently about 2,500 bopd.

Four production wells are currently off line for remedial work on pumps and are expected to be on line by the end of 2012, along with well 111.

PetroNeft Resources CEO Dennis Francis said that well 109 is cost-effective at this initial flow rate and expects that the rate will increase with further optimisation.

"Importantly, the well is producing 100% oil with no water so we are continuing to confirm our understanding of the size of the field," added Francis.

"While some operational challenges and variation in results should always be expected, we look forward to completing further wells in Arbuzovskoye over the coming months as we continue to focus on materially increasing our production profile and cash flows."

Independent reserve auditor Ryder Scott said that Arbuzovskoye comprises 2P reserves with a total of 13 million barrels of oil.

Total oil production capacity at the company’s Lineynoye and Arbuzovskoye oil fields is currently 2,500 bopd.