Pennpetro Energy plc, the company focused on developing strategic energy projects, offers an update on operations in Texas and Ukraine ahead of a shareholder call this evening (26th March).
Strategic restart of Texas operations
The Company is focused on securing a near-term return to positive cashflow and has authorised the restart of production from the first of the impaired assets in Texas, the Chalk Talk A-1H well, provided that the necessary and protective processes are completed.
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 the balance sheet date.
This move is intended to transform the Company into a cash-generative business while current global geopolitical landscape creates opportunity for higher returns on production.
Production is expected to restart at the Chalk Talk A 1H well, and this is expected to generate near-term revenue and potentially reverse prior impairment losses. Work is projected to begin shortly, pending ongoing re-negotiation of a lapsed lease.
RMD Group has confirmed to the Company that funds will be provided to fund the workover, which will utilise improved technical approaches and management best practices. Production can be expected to follow shortly after the workover.
Ukraine Progress
The Company is prioritising the Limnytska license in western Ukraine as the prime, large-scale asset for acquisition, whilst also evaluating other Western Ukraine licenses to leverage proximity synergies and near-term production. The Company has made progress in selecting the future operation and subsurface team with key members already engaged.
A prospectus is under development and will be shared upon completion, whilst fieldwork in Ukraine is now advanced towards enabling a well re-entry of the PG-2 well including preparing the drill pad and road access. The Company has already identified key suppliers and received quotes from service providers, along with requesting a cost estimate for the acquisition of 3D seismic for portions of the Limnytska license.
Future opportunity pipeline
The Company continues to conduct due diligence on additional opportunities in the USA and Canada. All major strategic moves will be fully disclosed to shareholders when firm information is available.
Mavriky Kalugin, Chief Executive Officer said: "We are delighted that there is the opportunity to secure near term revenue through re-starting operations in Texas which is significant. The Limnytska licence is a project shareholders are familiar with, we are now progressing through the key activities that will enable us to re-enter an historic well to further prove out this exciting opportunity. I look forward to sharing more information about the work we have been doing with shareholders."