Dublin-headquartered PetroNeft completes Licence 61 farmout
Oil India acquires 50 per cent interest in Licence 61 in return for a €85 million investment
PetroNeft chief executive Dennis Francis and N. K. Bharali, director, Oil Indiawith the signed farm out agreement for License 61
Under the terms of the farmout, Oil India has acquired a 50 per cent interest in Licence 61 in return for a total investment of up to $85 million. This consists of a $35 million upfront cash payment, a $45 million committed exploration and development expenditure on the licence and a $5 performance bonus, which is contingent upon average production from the Sibkrayevskoye Field reaching 7,500 barrels of oil per day (bopd) within the next 5 years.
The oil and gas company said that following completion of the farm out the debt owed to Macquarie and Arawak has been fully repaid.
Drilling operations will now re-commence with a 60-day horizontal well on the Tungolskoye Field and this will be followed by a further five production wells on the Arbuzovskoye Field, which is halfway through being fully developed. Current production at the field has slowly declined to 2,100 bopd from existing wells.
I’m delighted that we have now completed the Licence 61 farmout fully clearing all of our debt and leaving us with surplus cash and access to significant further funds to invest in growing the company. We look forward to working closely with our new partners Oil India and to realising the full potential of this asset and to developing further opportunities together,” said PetroNeft chief executive Dennis Francis.
Dublin-headquartered PetroNeft last month reported a pre-tax loss of $11.5 million for the 12 months to the end of December, up from a loss of $2.8 million a year earlier.