On October 6, 2020, Volga Gas plc, the oil and gas exploration and production company operating in the Volga region of Russia, announced the potentially significant discovery of a new oilfield as part of its ongoing exploration drilling program.

As announced on August 14, 2020 and published in the interim report of September 30, 2020, the Group is conducting a program to drill six exploration wells within its Karpenskiy License Area in structures separate from its existing oil reserves in the Uzen Field.

The presence of oil has been detected in a Triassic sandstone formation in a well in the north of the Uzen field. 

The boreholes in the Novo Kurilovskiy area reached a depth of approximately 1,200 meters. Whereas the original target interval, the Aptians formation in the Cretaceous layer at a depth of 900-1,000 meters, showed no signs of hydrocarbons, the drill cores from the deeper Jurassic interval between 1,144 and 1,218 meters helped identify 60 meters of oil-bearing pay. Since the potential thickness is above the calculated depth of the structural closure, the prospect likely has possible stratigraphic elements, indicating a significant upward trend in the reserve volume.

The economic significance of this discovery depends on the properties of the reservoir.

The immediate plan is to complete the drilling into the Permian salt layer, clear the open holes, and lay the formwork, which could take 10-14 days. After the drilling phase is completed, a working platform will be put on the spot to perform hole clearing, perforations, and pipes tests. Depending on the number of test intervals, this could take an additional 10-20 days.

Prior to drilling, management estimated the Unrisky’s potential recoverable oil in the Novo Kurilov Prospect to be about eight million barrels. The thickness recorded so far, coupled with the possible presence of a stratigraphic element, suggests this could be a much larger number. However, the commercial feasibility of the deposit will depend on borehole testing. New seismic measurements will be needed to provide some confidence in the calculation of reserves under SPE (Society of Petroleum Engineers) standards.

The 2020 exploration drilling program for the other four exploration targets in the Karpenskiy License Area will continue in addition to the assessment and evaluation of the prospects already completed.