Volga Gas PLC — half yearly results for the six month ended 30 June 2012
Volga Gas, the oil and gas exploration and production group operating in the Volga Region of Russia, announces its half yearly results for the six months ended 30 June 2012.
- Group production averaged 2,406 barrels of oil equivalent per day in H1 2012 (H1 2011: 2,092 boepd).
- Revenues of US$13.3 million (H1 2011 US$14.0 million).
- EBITDA of US$4.3 million (H1 2010 US$5.3 million).
- Net loss of US$5.6 million (H1 2011: net profit of US$3.0 million) after exploration write offs of US$7.4 million (H1 2011: US$21,000).
- Net cash flow from operations before working capital movements of US$2.8 million (H1 2011 US$3.8 million).
- Net cash at 30 June 2012 of US$3.3 million (US$5.9 million at 31 December 2011).
VOSTOCHNY MAKAROVSKOYE ("VM")
- First stage of the upgrade of the gas processing facility has been completed.
- Successful recompletion of well #30 during H1 2012.
- Three wells on the VM field ready to start full time production imminently.
- Long term testing of the production wells on the VM field continued during H1 2012.
- Continued production from a single well during H1 2012.
- Production in H1 2012 averaged 3.5 million cubic feet per day of gas (H1 2011: 3.8 mmcf/d) and 327 barrels per day of condensate (H1 2011: 313 bcpd).
- Successful sidetrack on the shut-in well #22 recently completed and will be put on production shortly.
KARPENSKIY LICENCE AREA
Supra-Salt (Uzenskoye oil field)
- Average production during H1 2012 was 932 bopd (H1 2011: 1,147 bopd) with some weather and market related disruption during March and April 2012.
- Production between 1 July and 31 August 2012 averaged 1,300 bopd.
- Underlying reservoir performance remains steady.
UROZHAINOYE 2 LICENCE AREA
- The Yuzhno Romanovskaya-1 ("YR#1") exploration well in the Urozhainoye-2 licence area was plugged and abandoned and the costs associated with the prospect written off in the income statement for H1 2012.
- Acquired the Sobolevskaya well with the intention to recomplete and, if successful, to re-establish production on an oil field discovered by a previous licencee.
Mikhail Ivanov, Chief Executive Officer of Volga Gas, said:
"Following completion of the first phase of the gas plant upgrade Volga Gas will shortly achieve its key aim of 2012: to put its VM field into full time production. We have also added further production capacity to our gas fields with successful sidetracking and well recompletions, while we have also maintained continued steady production from our Uzen oil field.
"After the gas plant becomes fully operational, expected within the coming weeks, production is anticipated to build up to over 3,000 boepd and as the further stages of the plant upgrade are concluded, we expect in 2013 to increase production towards 6,000 boepd. In the short term Volga Gas will also drill a shallow exploration prospect in the Pre-Caspian licence area and work over the Sobolevskaya well both of which, if successful, could add new production streams within a short timeframe.
"In addition, we are actively looking for opportunities to expand the Group's operations by value-accretive acquisitions. The Board looks forward to updating the market on the Group's progress in due course."