PetroNeft Resources plc the 100% owner of Stimul-T, the sole owner and operator of Licence 61, Tomsk Oblast, Russian Federation, has today announced that it has agreed the terms of a conditional placing of 34,527,141 new Ordinary Shares at £0.25 per Ordinary Share, raising gross proceeds of approximately US$17.3 million. PetroNeft Resources will use the funds to part finance pipeline construction, field development and well and facilities, exploration activities and general corporate overheads.
The funds will be used in combination with the recently announced US$80 million Standard Bank debt facility to develop PetroNeft's portfolio of 4 proven oil fields and exploration assets contained within Licence 61, Tomsk Oblast, Russia.
Procurement of pipe will begin immediately for the construction of a pipeline in winter 2008/2009 that will allow PetroNeft to monetise its 4 proven oil fields, by moving into production during the second half of 2009.
Current projections for the first two fields, Lineynoye and West Lineynoye, estimate initial production rates of 4,000 barrels of oil per day in 2009, rising to 14,000 barrels of oil per day in 2012.
In addition, the funds will be used to manage field development issues, infrastructure and development costs, ongoing business development and finally general corporate overheads.
Dennis Francis, Chief Executive Officer of PetroNeft Resources plc commented: "This marks another major step in PetroNeft's development. Two successful drilling seasons have thus far proved up 4 oil fields and enhanced our understanding of the very significant potential within Licence 61. This progress, and the West Korchegskaya exploration well, which spudded last week, means that we are now successfully putting the pieces together to reach first commercial oil production in the second half of 2009.