Zoltav, the CIS-focused oil and gas exploration and production company, announces results for the six months ended 30 June 2014.
Corporate Highlights
Acquired 100 per cent. interest in the Bortovoy Licence in the Saratov Oblast of the Russian Federation on 18 June 2014 for US$180 million - 3,215 square kilometre area containing a number of productive gas fields, a processing plant and significant appraisal upside
Bortovoy Licence contains Proved plus Probable Reserves of 750 billion cubic feet (21.2 billion cubic metres) of gas and 3.9 million barrels of oil and condensate
Considerable upside potential from additional prospects within the Bortovoy Licence area and scope for increased production through the construction of additional facilities
Transaction supported by major shareholders - raised US$66 million from ARA Capital, Crediton Invest and Matteson Overseas through the issue of Zoltav shares at US$1.60 (100 pence) per share; and the vendor, Bandbear, accepted one-third of consideration in Zoltav shares
Appointed Marcus Rhodes and Alastair Ferguson as non-executive directors on 19 May 2014 (Alastair Ferguson became an executive director on 23 September 2014) - Marcus Rhodes is an experienced director of major companies operating in Russia/CIS; Alastair Ferguson has extensive experience in the Russian oil and gas market
Appointed new Director Technical and Chief Geologist of Bortovoy Licence operating company; and welcomed 287 new employees to the Company
Operational Highlights Bortovoy
Production of 36.4 million cubic feet/gas per day and 457 barrels/oil per day during the period (only 13 days of Zoltav ownership included in H1 2014 financial results)
Focus has been on restoring Western Gas Plant to full production capacity of 14.2 billion cubic feet per annum during H1 2015
Conducted extensive workover operations and in the process of drilling an infill well on Karpenskoye field; advanced programme of hooking-up Zhdanovskoye field to Western Gas Plant
Running pre-feasibility study for gas plant construction in east of Bortovoy Licence
Operational Highlights Koltogor
Completed major 3D seismic acquisition programme over the Koltogor Licence - processing/interpretation ongoing
Completed successful testing of Well 141 on the Koltogor Licence confirming field commerciality
Completed successful testing of Well 103 on Koltogor 10 in both the Upper Jurassic and Bazhenov shale zones resulting in discovery of new West Koltogor oil field
Registration of additional 221 million barrels of Russian standard C1+C2 oil reserves, bringing current registered Russian reserves on Koltogor Licences to 487 million barrels
Summary financials
Maiden revenues for Zoltav of US$1.6 million from 13 days' production from Bortovoy Licence
Operating loss US$6.7 million (H12013: US$2.3 million)
Cash resources and undrawn facilities at 30 June 2014 were $21.3 million
Symon Drake-Brockman, Executive Chairman, said:
"The first half of 2014 saw a significant corporate milestone in the recording of Zoltav's first revenues from 13 days of gas and oil production.
"With the acquisition of the Bortovoy Licence now complete, our focus there is on operations and in particular on ensuring that the Western Gas Plant is operating at full capacity; while concurrently developing an appraisal strategy for the highly prospective eastern fields. At Koltogor, the work programme which was completed during the period under review has resulted in the prospect that the licences are substantially larger assets than previously envisaged."
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