analyst field visit september 2010 handout bookletl...

PetroNeftPetroNeftPetroNeftPN ConfidentialConfidentialConfidentialConfidential

PetroNeft Resources plc Licence 61

Tomsk Oblast, Russian Federation

PetroNeft Resources plc Licence 61

Tomsk Oblast, Russian FederationTomsk Oblast, Russian Federation Analyst Field Visit

September 20-21, 2010

Tomsk Oblast, Russian Federation Analyst Field Visit

September 20-21, 2010

1

PetroNeftPetroNeftPetroNeftPN Regional Location Map

BarentsSea Urengoy Gas Field

350 TCF

West Siberian Oil & Gas BasinDiscovered Reserves144 billion bbls of oil

1,300 TCF gas

350 TCForiginal reserves

Samotlor Oil Field

West Siberia Oil & Gas BasinWest Siberia Oil & Gas BasinWest Siberia Oil & Gas BasinWest Siberia Oil & Gas Basin Licence 61 (Ryder Scott Evaluation)Proved and Probable reserves 70 million bblsPossible reserves 460 million bbls

East Siberia BasinEast Siberia BasinEast Siberia BasinEast Siberia Basin

27 Billion Bbls original reserves

Exploration resources 75 million bbls

TimanTiman PechoraPechoraTimanTiman PechoraPechora

TurgayTurgayTurgayTurgayLicence 67 (Russian State Reserve Committee)

Volga UralVolga UralVolga UralVolga Ural

0 1,000Gas Pipeline

TurgayTurgayTurgayTurgay

G Fi ld

C3 (Possible) reserves 55 million bbls

North Caspian BasinNorth Caspian BasinNorth Caspian BasinNorth Caspian Basin

2

PN LicencesKilometers

Gas PipelineOil Pipeline

Source – USGS

Gas FieldsOil Fields

PetroNeftPetroNeftPetroNeftPN Tomsk Oblast

PetroNeftPetroNeft67676767

Chazhemto

Tomsk Oblast Very Active Region

3

Tomsk Oblast Very Active RegionRosneft, Imperial Energy, TNK-BP, Gazprom, Gazpromneft, local companies

PetroNeftPetroNeftPetroNeftPN

Raskino,

TN

Ob

Raskino

Ust-

K

b River, Тyм

30 тVa

Ка Li

West K

orch e

Korch K-Tym

ievsky

Brid

28 к

32 км

т

Novougino,

asugan River35

Tyms

ra

60 км

20 км

100 км

7км №

Tym

neynoye№

8

egskaya№

1

hegskaya №123 км

8 км

2

60км

Khanty-M

Каrgasok

dge Тungolskoye№

№6

Izba

28 км

22 км

кмт sk м №7

To To(Tom

sk-Karga

m R

iver

Negotka R

i

м

8 км

22 км

Mansiyisk A№

4

omsk

asok450 км

)

iver Port Tom

Autonom

Kiev Egans

LegendLicence 61 B

oYear-round RW

inter Road

Paved Road

Planned Pipe

sk Region

mous R

egi

koye oil field

4order

Road

eline Route

n on

PetroNeftPetroNeftPetroNeftPN Major Activities

Licence 61 Major ActivitiesAcquired via 2004 State Auction:• 4,991 square kilometers

• 14 prior wells drilled in the Soviet era RiverRiver• 14 prior wells drilled in the Soviet era

• 2,654 kms of vintage 2D seismic data

• 2 discovered fields at Lineynoye and Tungolskoye

Since acquisiton, PetroNeft has:R d 2 654 k f i t 2D i i d t

Lineynoye

Korchegskya

kaya River

Nazinskaya River

Lineynoye

Korchegskya

kaya River

Nazinskaya River

• Reprocessed 2,654 kms of vintage 2D seismic data

• Reprocessed 14 Soviet era wells

• Acquired 1,055 line kms of new 2D seismic data

• Drilled 3 Delineation and 3 Exploration wells

Tungolskoye

Vartovskoye

Malaya Vartovska

Tungolskoye

Vartovskoye

Malaya Vartovska

• New fields at West Lineynoye & Kondrashevskoye

• Over 25 identified Prospects

• RS Reserves – 70 million bbls 2P

• Russian GKZ Reserves – C1+C2 – 95 million bbls

Kiev-Eganskoye

Vartovskoye

License 61

Kiev-Eganskoye

Vartovskoye

License 61License 61

• Board Sanctioned Lineynoye Phase 1 Project – June 2008

• Raised $27.5 million for Phase 1 Project – Sept 2009

• Commenced production drilling operations – March 2010

• Signed $30 million Macquarie Bank Facility – May 2010

Seismic 05/06

Seismic 06/07

Wells Planned 2008

Wells Existing

Kievsky Yegan River

Vintage Seismic

Seismic 05/06

Seismic 06/07

Wells Planned 2008

Wells Existing

Seismic 05/06

Seismic 06/07

Wells Planned 2008

Wells Existing

Kievsky Yegan River

Vintage Seismic

Wells Drilled 2008

5

Signed $30 million Macquarie Bank Facility May 2010

• Completed pipeline construction – July 2010

• Commenced year round production – August 2010 Kievsky Negotka

Year-round Road

Winter Road0 25

kilometers

Vintage Seismic

Kievsky Negotka

Year-round Road

Winter Road

Year-round Road

Winter Road0 25

kilometers

0 25

kilometers

Vintage Seismic

PetroNeftPetroNeftPetroNeftPN Licence 61 (Tungolsky)

Oil Fields / Prospects / Potential Prospects9

10

21 20Map ref. Field/Prospect Horizon(s)

Oil fields 1 Lineynoye Oil Field UJ

Lineynoye Oil Field

West Lineynoye Oil Field

Sibkrayevskaya Prospect

31 8

6

22

1211 7

234

5

Oil fields 1 Lineynoye Oil Field UJ2 Tungolskoye Oil Field UJ3 West Lineynoye Oil Field UJ5 Kondrashevskoye Oil Field UJ

Prospects 2 Tungolskoye West Lobe and North (2) UJ4 Lineynoye Lower UJ Kondrashevskoye

Arbuzovskaya Prospect

2

1319

North Sea

Block

y y6 West Korchegskaya LJ7 Arbuzovskaya (Varyakhskaya) UJ8 Arbuzovskaya North & Upper (2) UJ9 Emtorskaya UJ

10 Emtorskaya Crown UJ11 Sigayevskaya UJ

Tungolskoye Oil Field

Kondrashevskoye Oil Field

14

16

1518

Block12 Sigayevskaya East UJ13 Kulikovskaya Group (2) UJ14 Kusinskiy Group (2) C, UJ, LJ15 Tuganskaya Group (3) C, UJ, LJ16 Kirillovskaya (4) C, UJ, LJ17 North Balkinskaya UJ, LJ

16

17 Kiev

18 Traverskaya C, UJ, LJ19 Tungolskoye East UJ20 Sibkrayevskaya Crown & North UJ

Potential Prospects (Leads)

21 Emtorskaya North UJ22 Sibkrayevskaya East UJ23 S b h UJ

6

24 Eganskoye Oil Field

(Leads) 23 Sobachya UJ24 West Balkinskaya UJ

Horizons Key:Cretaceous CUpper Jurassic UJMiddle/Lower Jurassic LJ

PetroNeftPetroNeftPetroNeftPN Lineynoye Oil Field Development Area

L-3L-5

L-1

L-7L- 8 Lineynoye Arbuzovskaya West Lineynoye

Planned 2012L-6

L-4 L-2

Kondrashevskoye

Planned 2010Planned 2012

LegendOil Fi ld

Kondrashevskoye Planned 2011

Oil FieldProspect Ready for DrillingProspectPotential Prospect

K-1

7

ProspectPrior WellsPetroNeft WellsCI = 10 metersStructure Map on Base Bazhenov Horizon

meters

feet

PetroNeftPetroNeftPetroNeftPN Vasyugan Suite Correlation in Lineynoye Field

L-5 L-1 L-6 L-2

8

PetroNeftPetroNeftPetroNeftPN Lineynoye Field Development Schematic

Oil-Water-Contact from L-5 -2417

Pad 2

1

4

6

789

5

Central Processing

L- 1

Pad 2

113

116

115114

34

28

7

6

Processing Facility

L- 6Pad 3 110

112

113

111117

Pad 1

65

43

2 1

Slant Hole

Camp

Oil-Down-To from L-6 -2430

1092

9

0 1 2 3 4 kms

Structure Map at Top Reservoir showing area where Main Oil Sandstone is underlain by Shale

PetroNeftPetroNeftPetroNeftPN Vasyugan Fm. Correlation in Lineynoye Field

J11

J11 J1

1

Bazhenov Fm.

Georgievskaya Fm.

20 m J1

2

J12

J12

J12

J12

Vasyugan Fm.

10

PetroNeftPetroNeftPetroNeftPN Pad Design Lineynoye Field

DATE SHEET

item number

1 Ad. Water block 1

2 Water tank 1

300

2013

3 Boiler 1

4 Oil tank site 1

5 Pipe stalls 10

6 Drawworks unit 1

7 Tank park 1

8 Pump block 1

1840 2 4 10 15

21

211

8

35

135

4

18

8 Pump block 1

9 Compressor block 1

10 Power generation train 1

11 Crew camp 1

12 Flare site 1

13 Pad bund 1

12

10 15

15

18

7 8 9 10

6

3

2

200

39

13

29

14 Cement site 1

15 Water well 1

16 Energy Complex 1

17 Plank foundation 1

18 Mud pit 1

19 Main entrance road 1

17

15

40

R 55

5 15 5155 55 15

19 Main entrance road 1

20Fire dangerous area

contour 1

21 Fire extinction basin 1

22 Boiler pit 1

23 Fuel Storage

6011

60 19 5 2523

1640

R 5514

8

8

11

PetroNeftPetroNeftPetroNeftPN Well Design

0100200300

500 1000 1500Vertical section

Angle build

D e v i a t I o n, m

R=382 m (i=1,5° per 10 m)

300400500600700800900

Conductor shoe Ø 245 mm, 800 m

90010001100120013001400

Angle hold section

D e

p t

h,

m

150016001700180019002000

24°

V e

r t

I c a

l

1800 m

210022002300240025002600

Angle decrease section

Production string shoe Ø 168 mm, 2650 Pump set up section

12Source SNIIGGMS

PetroNeftPetroNeftPetroNeftPN Well Design

0

Casing/hole size Cement Type Mud Type

Conductor Ø 324 mm

Bentonite

Cement, density 1.83

Clay mud, density 1.18

500 Surface casing Ø 245 mm

cement, density 1.48up to surfase


Polymer clay

1000

Bentonite cement,

density 1 481500

2000

Production casing Ø 168 mm

density 1.48up to 150 m over surfase casing shoe Polymer clay

mud, density 1.1

2000

2500


R i

Pump set up section

13

2650

Reservoir

PetroNeftPetroNeftPetroNeftPN Drilling and Completion Time Comparison

40

Construction Schedule for Lineynoye Development Wells

30

35

40

#109

20

25

er o

f day

s

#110#112

#113#114

33

2523

182010

15Num

be

#115 #116 #117 #111

14 15 15 1511

13

710 10

8 9

0

5

14

Drilling Completion

PetroNeftPetroNeftPetroNeftPN Schematic of a Water Flood System

TREATINGPLANT

RETURNWATER

LACT OIL SALE

OIL

FUTURE FACILITIES

INJECTIONPLANT

PLANT

SOURCE FUEL GAS

STORAGE

TREATER

WELLHEAD

SEPARATORSKIMMER

WELLHEADINJECTION

CONTROLMANIFOLD

SOURCEOF

WATER WATERDISPOSAL

WELLHEAD

INJECTIONWELL

PRODUCTIONWELL

PRODUCTIONINJECTION

WATERWELL

SOURCE

Convert ~ 1/3

RESERVOIRCenomanian Water Sands at ± 1,850 m

Existing Wells

15

Upper Jurassic Oil Reservoir at ± 2,400 m

PetroNeftPetroNeftPetroNeftPN Hydraulic Fracturing

Protecting the environment

What is Hydraulic Fracturing?- Pumping of viscous fluids and sand under high pressure into the formation

How is Ground Water & Drinking Water protected?p g g p

to create a high permeable fracture into the reservoir.

Why Hydraulically Stimulate (Fracture) a well?1. Remove Formation Damage caused by Drilling/Completion activities (near

wellbore damage).2 E d d i h l i h i

p

1. Proper Well Design – approved by local Government Authorities.

2. Casing and Cement protects and isolates both Water Zones and P d i Z

16

2. Extends a conductive channel into the reservoir:a. Increases the natural productivity of the well with a high

permeability channel,b. Increases the drainage area of the well to contact isolated reservoir

sands.

Productive Zones.3. Impervious Shale layer above

productive zone.4. Thick interval between Ground

Water and Productive Zones.

PetroNeftPetroNeftPetroNeftPN Effective Fracturing in Russia

• Almost all Siberian oil wells fall into the intermediate permeability segment (1 mD > k < 50 mD). These wells produce well enough if completed and produced with customary practices. However, they can often be converted into excellent high volume producers by applying effective fracturing technology matched with a lift system to take advantage of the enhanced productivity.

Siberian Oil Well Data Typical LineynoyeWell Field Units

Pr, average reservoir pressure 200 262 atmospheresPb, bubble point pressure 120 83 atmospheresKo permeability to oil (liquid) 5 3 to 40+ millidarciesKo, permeability to oil (liquid) 5 3 to 40+ millidarciesh, formation thickness 15 2 to 15 metersVo, oil viscosity (liquid) 1.5 0.5 centipoiseBo, formation volume factor 1.2 1.286Ct, total compressibility 2.94E-04 2.00E-05 atm -1Re, drainage radius 250 500 to 700 meters

• While a typical Siberian well: 5 mD, 15 metres, with a moderate skin damage produces ~ 20 m3/day (125 bopd),

• the same well stimulated effectively will produce up to 175 m3/day (1,100 bopd), depending on

Rw, well bore radius 0.1 0.1 meters

y p p y ( ) p gthe flowing bottom hole pressure created by the lift system

• Each frac job should be designed individually using specific well parameters so that proper stimulation will occur. Effective fracture geometry is very sensitive to permeability changes in intermediate permeability reservoirs

17

Joe Mach, et. al


INPUT OUTPUT

Lineynoye Well Productivity

10 Horizontal permeability, khorz (md)0.73 Oil (or gas) viscosity at reservoir conditions, uo (cp)

1.162 Oil (or gas) formation volume factor, Bo or Bg (Rvol/STvol)0 Skin factor3777 reservoir pressure, pe (psia)

199 reservoir temperature (deg F)

00 500 1,000 1,500

VERTICAL WELLFLOW RATE CALCULATION

Vert. ( 16 ) skinVert. ( 12 ) skin

Geometry121 spacing (acres)0.35 wellbore radius, rw (ft)49.2 Height, h (ft)

1,295.3 reservoir radius, r eh (ft)

500

1 000)

Vert. ( 8 ) skinVert. ( 4 ) skinVert. ( 0 ) skinVert. ( -2 ) skin

16 12 8 4 0 -2

Drawdown PwfVert. ( 16 )

skinVert. ( 12 )

skinVert. ( 8 )

skinVert. ( 4 )

skinVert. ( 0 )

skinVert. ( -2 )

skin(psi) (psi) (STB/D) (STB/D) (STB/D) (STB/D) (STB/D) (STB/D)

0 3,777 0 0 0 0 0 0250 3,527 42 51 63 84 125 165500 3 277 85 102 127 168 250 330

1,000

1,500

Dra

wdo

wn

(psi

)

-2 skin(0)

500 3,277 85 102 127 168 250 330750 3,027 127 152 190 252 375 495

1,000 2,777 170 203 253 336 500 6611,250 2,527 212 254 317 420 625 826

1,500 2,277 254 305 380 504 750 9911,750 2,027 297 355 443 588 875 1,156

2,000

2 5002,000 1,777 339 406 506 672 1,000 1,3212,250 1,527 382 457 570 756 1,124 1,4862,500 1,277 424 508 633 840 1,249 1,651

2,500

(STB/D)

1. Lineynoye Well inflow performance for a 10 mD, 15 metre thick reservoir 2 V ti l W ll d 2 ki

18

2. Vertical Well assumes zero and -2 skin3. Experience shows that in prediction mode a fixed BHP of 1500 psi is a reasonable approximation for continued ESP use


EXAMPLE FRACTURE PROFILEFRACTURE PROPAGATION SOLUTION

Hydraulic Fracture

Width ContoursWidth (cm)

0.20.40.60.811.2

Stress2495

2500

Width Profiles

EXAMPLE FRACTURE PROFILEFRACTURE PROPAGATION SOLUTION

Calculated Values

Slurry Volume Injected 185.24 m3

Liquid Volume Injected 167.83(m^3)

Fluid Loss Volume 106 81(m^3) 1.21.41.61.822.2> 2.4

2505

2510

2515

VD

(m)

Fluid Loss Volume 106.81(m^3)

Frac Fluid Efficiency 0.42026

Net Frac Pressure 6516.1(kPa)

Length (one wing) 81.103(m)

Upper Frac Height 13.451(m)

Lower Frac Height 22.969(m)

2520

2525

2530

TV

g ( )

Upper Frac Height (TVD) 2497.2(m)

Lower Frac Height (TVD) 2533.6(m)

Total Frac Height 36.42(m)

Max. Frac Width at Perfs 2.2444(cm)

Avg. Hydraulic Frac Width 1.3223(cm)

0 20 40 60 80 100Length (m)

32000 34000 36000Stress (kPa)

2530

2535-2 0 2

Width (cm)

PROPPANT DESIGN SUMMARYFrac Length – Created 81.103 m

Frac Length – Propped 80.7 m

Frac Height - Avg. 29.955 m

P d H i ht (P Z ) A 15 408 FLOW PROFILEPropped Height (Pay Zone) - Avg. 15.408 m

Max Width at Perfs – EOJ 2.2444 cm

Propped Width (Well) - Avg. 0.85899 cm

Propped Width (Pay Zone) - Avg. 0.69615 cm

Conc./Area (Frac) - Avg. at EOJ 10.949 kg/m2

Conc./Area (Pay Zone) - Avg. at Closure 13.249 kg/m2

FLOW PROFILE

19

Conc./Area (Pay Zone) Avg. at Closure 13.249 kg/m

Frac Conductivity (Pay Zone) - Avg. at Closure 2077.6 md-m

Dimensionless Frac Conductivity (Pay Zone) 3.218

Total Sand Mass Pump 55.00 tonsExample design – each well will have individual design

PetroNeftPetroNeftPetroNeftPN Facilities Construction June 20, 2010

20

PetroNeftPetroNeftPetroNeftPN Central Processing Facility Schematic

Gas Piston Power

Generators

High Pressure Flare

Pad 1 W ll

Design Capacity

370,000 tons/year

7,400 bopd 3 X 450 KW

Future Expansion 1,000 KW

Boiler (heater)

Generators

Gas Separator

Heater Secondary

Low Pressure Flare

Wells

P2

2000 3

P11000 m3

Heater Seco da ySeparator

Oil Storage TanksPrimary Separator

10 atm

16 atmW ll 2000 m31000 m

Slug Catcher

Notes

1 No gas dehydration

16 atm40° CWell

Test Separator

MeterWater Storage Tanks

Future Expansion

1. No gas dehydration

2. Oil stabilization

3. Oil storage 2 days

4. Pumping 2 X 50%

60 m³/hr9,000 bpd

21

Meter

Pipeline

To Water Injection Stations

Water Storage Tanks5. No gas compression

6. Power supply - gas piston engine generators

PetroNeftPetroNeftPetroNeftPN General Plan – Production Facilities

N

28Pipeline Collection

27

2.13

105

6

19.4

19.1Heaters

Gas FlareStorage Tanks

2.21

7

4

10

33

5

8

19.619.5

19.3

19.4

19.2Separator Pump

Station

31179

8

121216

21.3

21.3

20.120.2 20.3

23

Control Room

Power Switchboard

Fire Water Tanks

BoilerLab

Emergency Flare Pit

Diesel Tanks

Foam Pump

24

21.1

21.1

21.1

21.2

21.6 22

21.4

21.5

25 14

1332

15Fire Fighting Equipment

Tanks

Power Generators

p

22

18 Parking Area

PetroNeftPetroNeftPetroNeftPN Export Pipeline Overview

Sanctioned in June 2008

First Phase

SibkrayevskayaProspect

WL and Lineynoye

Kondrashevskoye

Development of Lineynoye and West Lineynoye

Construction of 60 km production pipeline to Imperial Kiev-Eganskoye pipeline in Q1

ArbuzovskayaProspect

y

Tungolskoye

PetroNeft New Pipeline to K-E 60 km

to Imperial Kiev-Eganskoye pipeline in Q1 2010

25 year transportation agreement with Imperial includes use of storage, measuring and testing facilities g y

Kiev-Eganskoye

TraverskayaProspect

measuring and testing facilities

First pipeline oil production in August 2010

Production - 4,000 bopd end of 2010, 12,000 bopd in 2012

Additional Phases

Incremental addition of Kondrashevskoye, Tungolskoye and other discoveries

23

PetroNeftPetroNeftPetroNeftPN Export Pipeline – Infrastructure

Pipeline Infrastructure

Length 60 km, Diameter 273 mm

Capacity ~20,000 bopd

B i l d th 1 t (5 b l i )

Lineynoye

Burial depth ~1 metre (5 m below rivers)

9 pipeline isolation valves

3 helicopter pads

2 i li T’ f f t ti2 pipeline T’s for future connections

Pipeline Monitoring Procedure

The Company has an Emergency Response Plan in place and approved by p p pp ythe Russian authorities in event of an emergency.

There is a pipeline inspection monitoring programme in place that includes ongoing Kiev-

E kmonitoring of and control of oil flow and pressure changes in the pipeline. There is also a weekly visible inspection programme of the entire pipeline route.

Eganskoye

0 10 20 kms

24

Helicopter pad

T – Valves

Production Facilities “Imperial Energy “ Pipeline

CTP

Pipeline Isolation Valves

In the event of an shut-down there are 9 isolation valves located along the pipeline to mitigate any emergency.

PetroNeftPetroNeftPetroNeftPN Oil Transportation Scheme

60 km60 km

152 km

25

PetroNeftPetroNeftPetroNeftPN Infrastructure – Communications

Stimul – T, Tomsk

com

mun

icat

ion

,

1. Walkie-talkie

2. Office Network (Ethernet)

3 Production Network (Ethernet)

Satellite Station

Sate

llite

c 3. Production Network (Ethernet)

lite

com

mun

icat

ion

lite

com

mun

icat

ion

lite

com

mun

icat

ion

1. Walkie-talkie


3. Production Network (Ethernet)

Walkie-talkie Walkie-talkie

Oil treatment

facilities

Sate

l

Sate

l

Sate

l

Ethernet linkupKiev -

EganskoyeZavyalovo

CTPProduction Facilities Wireless link

Telemechanics data

facilitiesWireless link connection between Oil Treatment Facilities and Production Facilities


2. Production Network (Ethernet)

3. Walkie-talkie

less

link Voice communication

(radius 30 km)Well Pads

26 Drilling&Geology CampWell Pads

Mobile Radio Stations

Satellite Phones

Wire Telemechanics

data

analyst field visit september 2010 handout bookletl...

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