Volga Gas Plc (AIM:VGAS) Production report for Nov 2017

Volga Gas plc, the oil and gas exploration and production group operating in the Volga Region of Russia, is pleased to announce its average production volumes for November 2017.

In November 2017, average gas processing capacity utilisation increased by 50% compared to October 2017, while test production continued using exclusively the new Redox gas sweetening process. Due to extensive Redox process set-up in November 2017, only about 60% of produced gas managed to be supplied into the pipeline with the rest being flared.

In the coming months, implementation of the new process will continue with gradual increases in production. During this period it is expected that the average daily production of gas and condensate would be in the region of 3,600 boepd resulting in Group production of approximately 4,300 boe per day, excluding additional potential production from the Uzen well #101 and incremental volumes from the LPG project. Construction and commissioning of the LPG project is close to completion but is now expected in Q1-2018.

The increase in oil production reflects the Uzen well #101 test production which commenced in October 2017, utilizing electrical submersible pumps. While the absence of the necessary storage capacity at the well site has constrained the ability to conduct a full, extended well test; the data collected from the production testing operations indicate that the well would be able to sustain a flow rate within the range of management’s expectations of 600 barrels of oil per day. Production testing continues while construction of a well site storage facility and a flow line to the main Uzen oil field facility is concluded – expected during December 2017.

The average production in November 2017 was 4,946 barrels of oil equivalent per day (44% higher than October 2017).

Average production comprised:

November 2017

Average

October 2017

Average

 Jan-Nov  2017

Average

Gas:

18.0 mmcfd

12.0 mmcfd

19.2 mmcfd

Condensate 

1,134 bpd

862 bpd

1,147 bpd

Oil

811 bpd

577 bpd

575 bpd

Total

4,946 boepd

3,432 boepd

4,916 boepd

Production data is based on preliminary monthly production reports prepared for the purposes of submissions to tax authorities for Mineral Extraction Tax purposes.



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