23 July 2007
Matra Petroleum plc ("Matra" or the "Company"): Matra Petroleum announces the spudding of its first well in Russia
Matra Petroleum plc has spudded its first well of a four well drilling programme in Russia on the Arkhangelovskoe License, 20kms north of Orenburg city. The well, Arkhangelovskoe – 12, in which Matra has a 100% interest via its Russian subsidiary "OOO Arkhangelovskoe", will be drilled using Orenburg Drilling Company's rig 3-D and will test the Sokolovskaya structure.
The well spudded on 20 July, and drilling is expected to take approximately 120 days to reach a total depth of 3900m, testing up to five potential reservoir targets within the Permian, Carboniferous and Devonian formations that are productive in nearby fields. The well is expected to cost approximately $4.6 million.
Extensive coring and open-hole testing is planned in the zones of interest, the first of which are estimated to be encountered after approximately 65 days.
Peter Hind, Matra's Managing Director said:
"This is a highly prospective well and success will have a huge impact on the company. Having acquired the Arkhangelovskoe Licence as recently as March 2007, I am delighted that we have been able to move quickly to contract a rig and to be spudding our first ever well in Russia."
On 9th July 2007 Matra announced a gas discovery from its 40% owned Horvatkut-1 well in Hungary.
The information in this report that relates to technical matters has been compiled by Dr Neil Hodgson (BSc, Phd) Matra's Exploration Director a Petroleum Geologist with more than 20 years experience and who is a Fellow of the Geological Society and a Member of the Petroleum Exploration Society of Great Britain (PESGB) .
For further Information, please contact:
Matra Petroleum
www.matrapetroleum.com
Peter Hind, Managing Director +44 (0) 7990 807855
Neil Hodgson, Exploration Director +44 (0) 7973 342822
Aquila Financial Limited
www.aquila-financial.com
Peter Reilly +44 (0) 207 7202 2601
Yvonne Fraser +44 (0) 207 7202 2609
Matra's nominated Advisor is
RFC Corporate Finance Ltd
Contact: Steve Allen +61894802500
Background to Arkhangelovskoe – 12
Arkhangelovskoe – 12 is the first well to be drilled on the Arkhangelovskoe License and Matra's first well in Russia. (NB. The well name and number is designated by the local authorities and is in not indicative of previous drilling or ranking)
The well will test the Sokolovskoe structure which was the subject of an independent review by Senergy Ltd. (Senergy). The well is located up-dip from the 309 well (some 4 kms to the North and outside the Arkhangelovskoe License) which tested at 1850 BOPD.
Senergy were asked to study the data on one of the five potential reservoirs of the Sokolovskoe prospect and they concluded that there was an 80% chance of making a commercial oil discovery with the well and that there was a 40% chance of discovering the most likely estimate of 32 mmbbls of prospective recoverable resources.
Assuming an international oil price of US$ 50/bbl (current actual prices US$ 70-80/bbl) and a 10% discount rate Senergy assessed the Net Present Value to be US$ 93 million and the Estimated Monetary Value (EMV or risked pre-drill valuation) to be US$ 78 million.
This review did not consider the other 4 potential reservoirs or the other identified structures on the License.
In the event of a discovery, approval will be sought to allow test production at the same time as applying for a 25-year exploitation license over the discovery area. Initial production may be achieved within a few months of well completion via existing infrastructure.
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