This looks a very good bet? Mentioned in the share magazine.

Davy Research
Petroneft
(PTR LN)
Releases operational update
10 March 2011
Job Langbroek
Closing Price: $0.95 Rating: Outperform 09/08/10
FACTS: Petroneft has released (March 10th) an operational update. Reserves (2P) have been increased from just over 70m barrels per day to 97m barrels. Seven out of nine fracced wells are producing at 400 barrels each. Two more are still due to come back on-line. The first well in the second development pad has started and the first exploration well this year will commence in April. Macquarie has converted a standard debt facility to a reserve base facility of up to $75m of which $30m is approved. A further update is expected in early April.

ANALYSIS: The statement delivers on most parts of the business plan as guided by the group. Reserve growth to 97m 2P barrels is up 37% from just over 70m barrels with the increase coming roughly half through drilling and half through the addition of licence #67 to its portfolio. The first of this year's 17 development wells is due to complete very shortly and the first of this year's five exploration/appraisal wells will commence on the 12m barrel Kondrashevskoye prospect in April. Production output has suffered from a difficult February in the field. Consequently, only seven of the nine fracced wells are back on stabilised flow, running at 400 barrels per day on average. Petroneft now expects production to be in the 3,500-4,000 barrels per day range by early April. The conversion of the debt facility to reserve base lending is cheaper and points to the evolution of Petroneft as an oil and gas producer. The facility will obviously increase operational flexibility.

DAVY VIEW: The reserve upgrade and ongoing operational development of the Linenoye field is as expected. In all, this year's exploration targets and appraisal is targeting up to another 100m barrels of reserve growth. The production numbers will disappoint but should just be a function of timing. Guidance for exit production of 8,000 barrels per day by the end of 2011 is not challenging in the context of an additional 17 development wells on top of the nine drilled in recent months. Our valuation of 72p per share is built on a production profile which is very achievable and we see significant opportunity for reserve growth and value addition on top of the existing 2P reserve base. Our rating is 'outperform', a position made even more tenable by the recent share price pullback.

http://www.investegate.co.uk/Article.aspx?id=201103100701116879C/

http://www.investegate.co.uk/Article.aspx?id=201103210700092721D

All coming together,not long to wait?


At present, seven of the fractured wells have come back fully online and are averaging over 400 bopd after clean-up and normal initial decline. We currently anticipate that production will be in the 3,500 bopd to 4,000 bopd range by early April when all wells are back on production and we will provide a further update at that time.



Russia new oil tax regime to take effect by July
Fri Mar 25, 2011 2:24pm GMT
Print | Single Page[-] Text [+] MOSCOW, March 25 (Reuters) - Russia's new oil and oil products tax regime will take effect no later than July, deputy Finance Minister Sergei Shatalov told reporters on Friday.
"There are a few small problems with certain companies . . . We hope that a decision will be taken soon," he said, adding that the new tax regime -- that aims to lower duties on crude exports while increasing those on oil products -- will be enacted in July at the very latest.

Russia's Energy Ministry has submitted a new tax regime proposal to the Finance Ministry that would lower the crude oil export duty by around 7 percent.

Nobody seems interested in this one apart from niceonecyril and myself but this has all the hallmarks of a little gem.....

This is a good'un by the look of things...unfairly underpriced....just has to go higher...much higher...

Can't believe the drop here....with all the wells to be spudded soon and it drops like a stone ......the market has taken a very short term outlook with this one....

With current production of 2500 bopd and market cap of 120 million, looks fairly good value, and there are of course the other potential prospects comming on line. PE<10
Lets have some views.

Whens the next set of results due?

June 22, 2011

Operations Update
Production currently averaging about 2,500 bopd, primarily from 7 wells

Autumn production enhancement programme planned to re-frac, with larger frac sizes, existing wells on Pad 1 and new wells on Pad 2

Planned number of wells required from Pad 3 to be reduced recognising thinner oil pays

Extension of Lineynoye oil field north of Pad 2 with thicker pay zones expected in the longer term to compensate for reserve and production reductions from Pad 3

Q1 2012 production target has been revised to between 4,000 to 5,000 bopd and Q2 2013 to between 7,000 to 9,000 bopd

Update: PetroNeft tumbles amid lower production targets
Wed, 22/06/2011 - 10:12 | Fiona Bond

Russian-focused oil and gas explorer PetroNeft Resources (PTR) saw its shares plummet almost 20% on Wednesday morning after it lowered its production targets.

The company has revised its first-quarter 2012 production target to between 4,000 and 5,000 barrels of oil per day (bopd), down from its previous objective of 7,000 - 8,000 bopd.

Looking further ahead, it has set itself a range between 7,000 and 9,000 bopd in the first quarter of 2013.

Its current production is averaging around 2,500 bopd, primarily coming from seven of the nine wells drilled last year.

The company's more conservative approach to output stems from its decision to reduce the number of wells drilled from Pad 3 on the Lineynoye oil field as a result of thinner oil plays.

In turn, PetroNeft will increase the number of wells drilled from Pad 2, where results have so far proved pleasing to the company, revealing the northern part of the Lineynoye field to have thicker pay and extend further than originally anticipated.

However, this will mean fewer wells available for production in 2011, thereby reducing the company's near-term production rate, PetroNeft said.

Chief executive Dennis Francis commented: "While the results of Pad 2 drilling are encouraging, the Pad 3 drilling results will limit near-term production growth. We are currently producing from less than 10% of our current discovered reserves and this year's exploration programme has the potential to double these reserves and hence our long-term production capability."

PetroNeft's high impact 2011 exploration programme is targeting over 100 million barrels net to the company on five prospects spanning Licences 61 and 67.

The Kondrashevskoye No 2 sidetrack well on Licence 61 is progressing on schedule, with results expected in early July, the company said. A second exploration well will be at Sibkrayevskaya, a prospect of over 40 million barrels. The site for a third exploration well, North Varyakhskaya No. 1, has also been prepared and is set to spud in August/September time.

Meanwhile, two exploration wells, Cheremshanskaya No. 3 and Ledovoye No.2a on Licence 67 will be drilled in the second half of the year.

"We remain confident in the longer-term reserve and production potential of Licences 61 and 67," Francis added.

Oil and gas analysts at Ambrian published a note: "In reaction to this update, Petroneft has been significantly marked down, reflecting disappointment over current hydrocarbon flow rates.

"Despite the clear negative tone of the announcement, we highlight that although near-term production will be reduced, overall field reserves are likely to sustain a much smaller decrease in absolute percentage terms due to the discovery of thicker-than-expected net pay sections to the north of Pad 2. This serves to moderate the overall decrease in total asset value over the life of the field; however, the short-term impact in cashflow terms will clearly be more material to the company's development planning and will serve to push back the profit point.

"Whilst we reiterate our 'buy' recommendation, we move to reduce our target price from 108p to 83p."

Prelimernary results 11-5-11
Interim res 9 -9 - 10

Looks like interim results due sept 2011

Operations Update





PetroNeft Resources plc (AIM: PTR) owner and operator of Licences 61 and 67, Tomsk Oblast, Russian Federation, is pleased to provide an update on its operations.





Highlights:



Kondrashevskoye No. 2 sidetrack well confirms 2P reserves

Lineynoye 206 contains thickest oil pay encountered to date

Lineynoye/West Lineynoye has materially thicker pay and extends significantly further north than originally anticipated

Several new oil bearing structures are now likely to the north of Lineynoye/West Lineynoye



Licence 61 Exploration/Delineation programme



The Kondrashevskoye No. 2 sidetrack has been drilled down dip from the Kondrashevskoye No. 2 well and penetrated the oil water contact in the objective J1-1 sandstone interval at -2,465 m true vertical depth ("TVD"). The reservoir interval of 3 metres in the sidetrack section was slightly thicker than in the vertical well with the top metre of the reservoir oil bearing.



Based on the results, the well has most likely confirmed the existing independent Ryder Scott 2P reserves of 8.1 mmbo attributed to the field and we will now update the reserves with the Russian State Reserve committee in preparation for field development. The exact timing of development will depend upon how the economics of this field compares with other nearby fields, most notably Arbuzovskoye.



Production casing has been run and cemented in the well so it can be used when the field is developed. The drilling crew is in the process of moving to the potentially high impact Sibkrayevskaya exploration prospect which will commence drilling shortly.



Licence 61 Development programme



The Lineynoye 206 development well drilled from Pad 2 to the north contained 21.9 metres of gross sandstone with 18.5 metres of net pay which is the thickest net pay interval encountered to date in the drilling programme. The reservoir interval was completely saturated with oil and confirmed an oil-down-to of -2,437.5 m TVD, some 15 metres deeper than the previously mapped structural spill point of the field to the north.



The results of this and other recent Pad 2 wells have shown that the northern part of the Lineynoye field has materially thicker pay and extends significantly further north than originally anticipated. This has positive implications for reserves and productivity in this region of the field and for the likelihood of several new structures north of Lineynoye/West Lineynoye to be oil bearing.



Dennis Francis, Chief Executive Officer of PetroNeft Resources plc, commented:



"We are pleased to have proved reserves for economic development at Kondrashevskoye and will incorporate this discovery along with Arbuzovskoye in our 2012 development planning. Pad 2 drilling continues to be very encouraging with the thickest oil pay encountered yet indicating an increased probability that oil has migrated north from the Lineynoye/West Lineynoye field into the various structures contained in the undeveloped Emtorskaya High area."

Davys update looks good for the near term sp

Petroneft has issued an RNS confirming that 4 Directors (including the CEO and CFO) bought 440,000 shares at prices between 35.25p & 35.71p yesterday following their exploration and operational update.

We also understand that the draft law on MET decrease for small oil field was approved by the Russian Duma in the second reading late yesterday afternoon. If approved in the third reading (which is as a rule a technical reading only) we understand the legislation would be in force starting January 1, 2012. This would be a very positive development for Petroneft. Previously the company have indicated that half their current reserves would qualify for the reduced rates of Mineral Extraction Tax under the proposed legislation. Given that netbacks in Russia are broadly $10-$12 per bbl, an additional c.$5 per bbl would be very significant. Our NAV for Petroneft is 62p. The MET changes if introduced would increase it to 70p

http://www.deweyleboeuf.com/~/media/Files/clientalerts/KeyChangesinRussianTaxLegislation.ashx

A couple of posts regarding the effect it could have on PTR,suggesting a screaming buy?? imho

I done some calculations regarding the MET discount for small oil fields based on current reserves and using a sliding scale.
Kondrashevskoye 8.12 million barrels 49% discount = $ 79 million extra.
Arbuzovskaya 13.24 million barrels 40% discount = $ 106 million extra.
Tungolskoye 15.48 million barrels 36% discount = $ 113 million extra.
Ledovoye 15 million barrels 37% discount = $ 111 million extra.
Total for these 4 fields alone is $ 409 million extra.


Eventually the penny will drop regarding the upside on Lineynoye / West Lineynoye field and other structures to the north because of the oil down to 2437.5 mtrs in well 206 and a net pay thickness of 18.5 mtrs within 21.9 mtrs of sandstone.
This is 15 mtrs deeper than previously thought and will lead to significant reserve increase for the Lineynoye / Lineynoye fields alone.
The discount on Mineral extraction tax for small fields will also give a serious boost to the profit margin once it comes into effect.

http://www.reuters.com/article/2011/07/21/russia-energy-tax-idUSLDE76K14E20110721

and:

Petroneft (USc) (PTR LN)
Price: $0.51 Rating: Outperform Issued: 09/08/10
Russian president signs into law reduced tax bill for small oil fields
Caren Crowley

FACTS: On July 21st, a new bill to encourage the development of smaller oil fields in Russia by reducing the Mineral Extraction Tax (MET) payable was signed into law by the Russian president. The law comes into effect on January 1st 2012.

ANALYSIS: The law allows for a sliding scale reduction in the MET for fields below 5m tonnes, roughly 37m barrels. The maximum reduction will result in a halving of the MET rate. This will occur for fields up to 7.5m barrels, whereas fields containing 30m barrels will receive only a 12.5% discount. Fields containing 22.5m barrels will receive a 25% discount and so on. The MET rate relief will have a material impact on cash net back to producers of small fields, such Petroneft. Petroneft believes the tax relief can boost cash from operations by $8m in 2012 alone. The impact should be greater in future years. In other words, there is a potential additional profit margin of $7 per barrel (at $80 per barrel export price) versus a typical profit margin of $10-12 per barrel for Western Siberian oil fields.

DAVY VIEW: The new law is very good news for Petroneft. At present we see the tax change improving our NAV of 62p per share to 70p per share. However, we believe the additional value could be greater than our initial 8p per share estimate as our model is based on an older field development schedule. We believe management will optimise its development programme to maximise the benefit of the new tax relief.

BINGO! LOL

04 August 2011

PetroNeft Resources plc

("PetroNeft" or the "Company")

Discovery of Significant New Oil Field at Sibkrayevskaya

PetroNeft Resources plc (AIM: PTR), the owner and operator of Licences 61 and 67, Tomsk Oblast, Russian Federation, is pleased to announce its largest single discovery to date, a new oil field at Sibkrayevskaya in Licence 61.

Highlights:

-- Sibkrayevskaya No. 372 well makes significant oil discovery in main Upper Jurassic target

o Approximately 12.6 metres of net oil pay in J1 interval - exceeding pre-drill estimates

o Good reservoir properties indicated with oil saturation throughout

o Open hole inflow test of 170 bopd (unstimulated)

o Sixth oil field discovered in Licence 61

-- Development drilling at Lineynoye continues to push field boundary significantly further north and encounters materially thicker pay

o An additional well is now planned to be drilled 500 metres beyond the most northerly well to date

-- Exploration to commence at Licence 67 with first well scheduled later this month

-- Russian Mineral Extraction Tax reduction law passed and comes into effect on 1 January 2012

o Enhancing profit margin from qualifying fields

Sibkrayevskaya No. 372 well

The Sibkrayevskaya No. 372 well at the Sibkrayevskaya prospect located in the north east corner of Licence 61 was spudded on 9 July 2011. It was a follow up to well No. 370 which was drilled in 1972. A comprehensive re-interpretation of the vintage well logs and drilling data from the 370 well using digitalised logs and modern interpretation tools had indentified potential "missed pay" in the Upper Jurassic J1 interval. In the new well, No. 372, the Upper Jurassic J1 oil reservoir horizon was intersected as expected at -2,350.5 metres true vertical depth. Preliminary evaluation of the logs indicates that the J1 interval consists of 12.6 metres of net pay with good reservoir properties and oil saturation throughout, exceeding pre-drill estimates. An open hole test was conducted over this interval and tested at a pro-rated inflow of 170 bopd unstimulated. Based on preliminary analysis, the oil is of good quality with an API gravity of 37 degrees, which is consistent with other fields in Licence 61.

Sibkrayevskaya is a very large structure which will require additional seismic and well delineation. The 372 well was drilled in a flank position on the structure and current mapping shows an area of over 50 square kilometres up dip from the oil-down-to level defined in the well. Current indications are that the ultimate recoverable reserves in the field could be significantly larger than the 44 million barrel pre-drill target defined by Ryder Scott for the prospect. The discovery also extends the area of known oil to the northeast corner of the licence area and improves the prospectivity of other structures in this area.

This discovery well adds a sixth oil field to Licence 61 and proves the strategy of following up on re-interpreted well logs from old wells that show potential by-passed oil pay zones. It is hoped to further appraise the Sibkrayevskaya oil field with a seismic programme and the drilling of at least one appraisal well in 2012.

Licence 61 Development programme

Two further development wells have been drilled from Pad 2 at the Lineynoye oil field. Well 208 encountered 8.8 metres of net oil pay. Well 207, which was the northernmost well drilled to date encountered 17.8 metres of net oil pay. This well was drilled at a location that had originally been interpreted to be outside the boundaries of the oil field and the result further proves that the Lineynoye field extends much further north than previously estimated. An additional well will now be added to this year's programme at Pad 2 to drill the reservoir approximately 500 metres further north of the 207 location.

The results of well 207 and other recent Pad 2 wells have shown that the northern part of the Lineynoye field has materially thicker pay and extends significantly further north than originally anticipated. This has positive implications for reserves and productivity in this region of the field and for the likelihood of several new structures north of Lineynoye/West Lineynoye to be oil bearing.

Licence 67 Exploration programme

Exploration on Licence 67 is due to commence shortly. The mobilisation of the drilling rig to the Cheremshanskaya site has been completed and rig-up operations are underway. It is expected that the well will be spudded later this month. The well is targeting objectives at the Upper, Middle and Lower Jurassic horizons following up on previously drilled wells. The well will take up to two months to complete drilling and testing.

Mineral Extraction Tax (MET) reduction law for small fields

The MET reduction law for small fields was signed into law by President Medvedev on 21 July 2011. The law will become effective from 1 January 2012. The law is applicable to undeveloped fields with Russian C1+C2 recoverable reserves below 5 million tonnes (approximately 37.5 mmbbls). The law applies a sliding scale of discounts depending on the initial size of the field. The Arbuzovskoye field which is the focus of our development activities for next year has Russian registered C1+C2 recoverable reserves of 1.3 million tonnes and consequently it will qualify for a 46% MET discount. This will significantly enhance the profitability and cashflows of the Arbuzovskoye and other qualifying oil fields and accelerate the development of such fields in the Licence area.

Dennis Francis, Chief Executive Officer of PetroNeft Resources plc commented:

"We are delighted with the discovery at Sibkrayevskaya, a significant new oil field which is our largest single discovery to date in terms of reserves. This is an especially important discovery, because it proves our strategy of following up on previously drilled structures by re-interpreting old well data using modern software and techniques to identify by-passed pay. The two well exploration programme now commencing at Licence 67 is also based on re-interpreted data from old wells. We look forward to updating shareholders on the results of these wells later in the year. "

Good result......this will be 100p or more at some stage....

Brokers note,

Davy Stockbrokers Today

Petroneft
(PTR LN)

Discovery to boost reserves by at least 45%; latest development wells very promising

04 August 2011
Caren Crowley

Closing Price:
$0.53

Rating:
Outperform

09/08/10
FACTS: Petroneft has released an operational update.

ANALYSIS: Petroneft has made its largest single discovery to date with the Sibkrayevskaya well on Licence 61 (Petroneft:100%) in Western Siberia. The well was drilled on the Sibkrayevskaya structure in the north-east corner of Licence 61 and was following up on potential by-passed oil pay identified from a re-interpretation of the electric logs from a well drilled in 1972.

Prior to drilling, the Sibkrayevskaya structure was thought to hold 44m barrels (mmbbl). On this basis, we estimated a discovery at Sibkrayevskaya could add just over 6p to our 70p valuation for Petroneft. This looks conservative now.

Based on results from the Sibkrayevskaya well, management believes that the ultimate recoverable reserves could be significantly larger than the 44 mmbbl pre-drill estimate. To contextualize this, a 44mmbbl discovery could boost Petroneft's proven and probable reserves by 45%. Preliminary results reveal a net pay thickness of 12.6m versus pre-drill estimates of up to 8.4m with good reservoir quality. An open hole test on the oil saturated interval flowed 170 bopd (unstimluated).

An appraisal well to define the size of the Sibkrayevskaya field is planned for 2012.

Elsewhere, log results from two more development wells on the Lineynoye oil field display material thicker net pay. This has positive implications for productivity (something Petroneft has struggled with) and reserve upgrades.

Exploration on Licence 67 is due to commence shortly with the spudding of a well on the Cheremshanskaya prospect. The exploration strategy for this prospect is the same as that for Sibkrayevskaya, that is, the Cheremshanskaya well will twin an old Soviet well to explore for by-passed pay. The well is targeting 30mmbbl net to Petroneft from multiple horizons. The well is due to spud later this month and is expected to take two months to complete.

DAVY VIEW: This is very good news from Petroneft. The successful oil discovery at Sibkrayevskaya adds at least 6p to our 70p per share valuation. The stock deserves to rally on this news.

http://www.davy.ie/LR?id=1393

RF an excellent result would be a apt discription,net play some 50% greater than expected. One could say it's negative in so much as it exceeds the field size for tax
relief,not that it is.The new tax laws coming in Jan 2012 are believed to be worth $8m
extra profit to PTR and adds credence to the 1 you mentioned,couple todays news with expected reserve update and doubling of production year end,migght make that a little conservitive??