PetroNeft Completes Nine Test Wells

April 15, 2010

Petroneft has completed drilling  nine production wells at the Lineynoye oil field scheduled for 201 0, the company reported in a news release . Preliminary results of the log and survey data indicate that the results of this well are in line with expectations. The top of the reservoir section was penetrated at 2,391m vertical depth subsea. The J1 reservoir interval is completely saturated with oil. The gross hydrocarbon interval in the well is 14.2m and the preliminary log analysis shows net oil pay is between 10.2m and 11.8m. Production casing will be run in the well and cemented, following which the production drilling rig will be skidded to drill the second well. An electrical submersible pump will be installed in the well with a work-over rig later in the programme.

Petroneft also reports that a pipeline from the Lineynoye field to the Kiev-Eganskoye field is progressing on schedule. A hydro test of the pipeline is scheduled for June 2010 following which the pipeline will be ready to receive first production in the third quarter of 2010, the company said.

Furthermore, the drilling rig, camp and necessary materials to drill the Arbuzovskaya Exploration well were successfully mobilized to location during the winter season. Rig-up operations are set to begin by September 2010 with drilling beginning in October after the 2010 nine well production drilling program has been completed. This is the first of at least three exploration/delineation wells to be drilled in the northern part of Licence 61 in 2010 and 2011. This programme has the potential to materially increase both Group reserves and the long term production potential of Licence 61.