Potential Return to Production in Texas
Pennpetro Energy Plc has decided to restart production at one of its four Texas wells, subject to administrative completion, with work potentially beginning within weeks and production shortly thereafter. This move is expected to generate near-term revenues and may lead to a reversal of prior impairment losses for the asset, contingent on a balance sheet assessment. Funding for the workover has been secured with RMD Group, and the company will update shareholders once confirmed.
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Pennpetro Energy plc, the company focused on developing strategic energy projects, announces that following CEO Mavriky Kalugin's visit to Texas to undertake an internal review of the Company's assets the Board has taken the decision to restart production at one of the four wells in Texas subject to necessary administrative and protective processes, ongoing, being completed.
The expectation is that with proper management this workover should result in near-term revenues for the Company being generated whilst other projects are being developed in parallel.
This may result in a partial or full reversal of the impairment loss for this asset as reported in prior periods, subject to an assessment to be made at balance sheet date.
It is anticipated that subject to any time required for re-negotiation of the lease, which was allowed to lapse by former management, that work could potentially begin within a matter of weeks from the date of this announcement, with production able to start very shortly, thereafter.
The Company will inform shareholders and market immediately once confirmed. Funding to work over this first impaired well asset has now been agreed with RMD Group.
Richard Spinks, Executive Chairman said: "The Board have taken the decision to re-start production on one of the Company's wells in Texas, and to reverse its impairment if conditions to do so can be achieved. This follows a detailed internal review resulting in Mavriky reporting to the Board, which assessed the potential for investment and returns from the Company's interests in Texas overall and on a well by well basis.
"This is something we have kept under review, and we welcome the opportunity to generate near-term revenue for Pennpetro. Our interests in Texas do not divert attention away from Ukraine, or other opportunities we are exploring but with the strong oil price currently, we felt this decision was in the best interests of the Company."
Cleaned text: letterheads, contacts and legal notices removed. View the original announcement ↗ · Company filings. Not investment advice.