Alliance Oil Company has signed an agreement to acquire LLC "GeoInvestService" for 30 million US dollars. LLC "GeoInvestService" holds an exploration license for the West-Osoveiskoye block in the Timano-Pechora region in Northern Russia. The license will be integrated into the Company's Kolvinskoye oil field operations and development plans. The acquisition is pending Federal Antimonopoly Service approval.
The West-Osoveiskoye license block is located on the East side of the Kolvinskoye oil field and covers an area of 670 square kilometers. At the time of the license issuance oil resources were estimated at 87.7 million barrels
(12.4 million tons) under Russian reserve classification (D1+D2). The prospective oil bearing Perm and Devonian formations are located at depths of 2,500-3,900 meters.
According to the current exploration and development plan, oil production at the West-Osoveiskoye block can commence in 2014-2015 and be processed and transported through the Kolvinskoye oil field infrastructure. Additional seismic studies will be conducted and an exploration well is scheduled to be drilled in 2012 with the further development of the license area integrated into the development of the Kolvinskoye field.
"We continue to increase the Company's resource base in Timano-Pechora and extend the reach of the Kolvinskoye field operations. The addition of the West-Osoveiskoye license block provides opportunities for further reserve and production growth in the region while realizing synergies with existing operations, says Arsen Idrisov, Managing Director of Alliance Oil Company.
