StockMarketWire.com - PetroNeft Resources said its oil production is steady at 2,500 bopd, that it is realising strong oil prices, and that it is beginning to see positive impact of pressure maintenance at Arbuzovskoye.

PetroNeft Resources had started to see some positive impact in the production well nearest to the injection well, similar to the response seen earlier at Lineynoye. This should expand to other nearby production wells in the coming months.

Production at Lineynoye remained very stable with little decline evident.

Discussions continued on both the re-financing and planned farmout of Licence 61 with particularly good progress on concluding a re-financing of the existing Macquarie Bank facility. The company was encouraged by progress in recent weeks.

It continued to make the principal repayments of $650,000 a month to Macquarie Bank from operational cash flows. The current balance on this facility, net of cash held by Macquarie in the Debt Service Reserve Account, was $13.6 million.

Subject to the successful completion of re-financing of the bank debt, or a farmout, plans were in place for re-commencement of drilling operations later this year.

This plan included a delineation well at West Lineynoye, commencement of drilling additional production wells at Arbuzovskoye and, in 2014, delineation wells at Tungolskoye and Sibkrayevskoye where significant upside potential and near-term developments are possible.




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