TIDMUEN
RNS Number : 1313A
Urals Energy Public Company Limited
21 December 2017
Dissemination of a Regulatory Announcement
that contains inside information according
to REGULATION (EU) No 596/2014 (MAR).
21 December 2017
Urals Energy Public Company Limited
("Urals Energy", the "Company" or the "Group")
South Dagi drilling and reserves updates
The Board of Urals Energy (AIM:UEN), the independent exploration
and production company with operations in Russia, is pleased to
provide the following drilling and reserves updates in respect of
the Company's South Dagi licence.
Spudding of the first well at South Dagi
The Company has spudded its first well, a planned exploration
well, at the South Dagi field on Sakhalin Island. The well's target
pay horizons are the Okobycay horizon and the Daginsky neogenic
horizon, with the target depth being 2,200 meters. It is
anticipated that this depth will be reached in the second quarter
of 2018.
The Board intends for this well to be the first well in a
programme of three exploration wells at South Dagi over 2018 and
2019, which are to be drilled by Urals Energy's own team using the
rig that was recently acquired from Jereh Group.
Any oil production from South Dagi can be transported by road
tanker to the Company's refinery at Petrosakh, a distance of 400
kms, which would increase the utilisation rate of the Company's
refinery. The refinery will not need additional investment to
process both the heavy and light oils expected from South Dagi.
Further announcements in respect of progress with the Company's
first well at South Dagi will be made in the New Year as
appropriate.
South Dagi reserves update
Urals Energy was awarded a 25-year exploration and development
licence for the South Dagi oil field in June 2016, following an
auction by the Russian State Authorities. The South Dagi licence
covers an area of 28.8 sq. kms and was the subject of an earlier
exploration and appraisal programme in the 1970s, followed by
additional seismic work done in the middle of 1990s and 2007.
During these periods two exploratory and six appraisal wells were
drilled.
The South Dagi field produced oil in the Soviet Union era and
detailed data was acquired. More recently, a micro-seismic survey
has been conducted in order to grade hydrocarbon potential and
optimise well locations.
As announced on 15 June 2016, the Russian State Registered
reserves of C1 plus C2, equivalent to 2P (proven and probable), on
the South Dagi license area are 17.7 million barrels, with C3 or
possible reserves of 9.0 million barrels. At shallow levels, the
oil is relatively heavy (23.5 - 25.5degAPI), with light oil (36.5 -
37.5degAPI), similar to the oil at the Company's Petrosakh
operation, at lower horizons.
The available data on South Dagi has been reviewed by Blackwatch
Petroleum Services as part of the Competent Person's Report
commissioned by the Company. The Board is pleased to announce that
Blackwatch Petroleum Services has estimated the mean total 2P
reserves at South Dagi to be approximately 23.5 million barrels of
oil across six reservoirs, when assessed under the international
Society of Petroleum Engineers classification.
Further details of Blackwatch Petroleum Services' probabilistic
volumetric analysis can be found in the table below.
(All in barrels) Probabilistic
------------------ --------------------------------------------------
P10 P50 Mean P90
------------------ ----------- ----------- ----------- -----------
Total - South
Dagi 38,341,692 20,916,095 23,466,880 11,518,015
------------------ ----------- ----------- ----------- -----------
The Board anticipates that the full Competent Person's Report
will be available in the early part of 2018. Further announcements
will be made as appropriate.
Andrew Shrager, Chairman of Urals, commented:
"The spudding of this first well at South Dagi is extremely
important for our Company, as it opens the possibility to increase
the production at our Petrosakh refinery, thus continuing to take
advantage of having the only refinery on Sakhalin Island. The
Blackwatch Report will be a comprehensive review of all data,
including detailed maps which will be of great assistance to the
Company, and for this reason has taken somewhat longer than
anticipated originally, which is understandable as we have built
our portfolio of licences significantly in the last two years."
Mr Vasily Nikoluk, Urals Energy's Chief Geologist, a graduate of
the Ivano Frankivsk University and the former head of the geology
department at Gazpromneft, who meets the criteria of a qualified
person under the AIM Guidance Note for Mining, Oil and Gas
Companies, has reviewed and approved the technical information
contained within the 'Spudding of the first well at South Dagi'
section of this announcement.
Mr Radwan Hadi, who meets the criteria of a qualified person
under the AIM Guidance Note for Mining, Oil and Gas Companies, has
reviewed and approved the technical information contained within
the 'South Dagi reserves update' section of this announcement. Mr
Hadi is a BSc graduate and was awarded an MSc in Chemical
Engineering from the University of Bradford in 1979. He is Deputy
Managing Director of Blackwatch Petroleum Services and has over
thirty five years of experience in the international oil
industry.
Glossary of Technical Terms
2P Proved plus probable
P90 resource: reflects a volume estimate that, assuming the
accumulation is developed, there is a 90% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a low estimate of resource.
P50 resource: reflects a volume estimate that, assuming the
accumulation is developed, there is a 50% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a median or best case estimate of resource.
P10 resource: reflects a volume estimate that, assuming the
accumulation is developed, there is a 10% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a high estimate of resource.
- Ends -
For further information, please contact:
Urals Energy Public Company
Limited
Andrew Shrager, Chairman Tel: +7 495 795
Leonid Dyachenko, Chief 0300
Executive Officer
Sergey Uzornikov, Chief www.uralsenergy.com
Financial Officer
Allenby Capital Limited
Nominated Adviser and Broker
Nick Naylor / Alex Brearley Tel: +44 (0) 20
3328 5656
www.allenbycapital.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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