The Group has a 90 per cent working interest in the Zagoryanksa licence area which is located immediately to the east of the Pirkovskoe licence. The Zagoryanska licences hold 96.4 mmboe of contingent resources (2008: 18.6 mmboe of contingent resources and 25.9 of prospective resources). The exploration and production licence covers 49.6 square kilometres and in January 2009 the Group received a five year extension for this licence which now expires in April 2014.
The required work programme includes a 3D seismic survey (completed); testing of well Zagoryanska 3 (underway); workover of well Zagoryanska 2; the drilling of an appraisal well, and; conducting geological and economic estimation of hydrocarbon reserves which are to be verified by the State of Reserves Commission.
The Zagoryanska 3 well has been drilled to a TD of 5,110 metres in the Lower Visean (V26) and was suspended in order to evaluate the data obtained from testing. Several potential gas bearing reservoirs were tested in the Carboniferous. In late 2009, additional testing of the well was farmed-out to a local company that is funding additional testing at their own expense in return for a share of any future production from the well. Following completion of this testing program, management will consider the workover of two previously drilled wells (Zagoryanska 2 and 8).
