Exillon Energy raises £21.3m for Russian oil projects, looks to cut operating costs by 60%

Exillon Energy (LON:EXI) has undertaken a share placement to raise £21.3 million to fund additional development activities, including infrastructure improvements that could slash operating costs by 60%.
The company will place a total 12.5 million shares at 170 pence, representing an 8% discount to yesterday’s closing price of 185 pence.
The proceeds will be used to fund the development of the company’s assets in the oil-rich Timan-Pechora and West Siberia regions of Russia. This will include seismic, water injection, additional drilling and infrastructure and is expected to help the group reach a production of 14,000 barrels per day in Q2 2011. The management has estimated that the planned infrastructure investment could, assuming a production of 10,000 barrels, cut the average per barrel operating cost by 60% from US$12/barrel prior to completion of infrastructure investment and assuming production of 5,000 barrels per day.

Exillon added that in a report effective 1 May Miller & Lents estimated its 1P (proven) reserves to be 8 mmbbls (million barrels), 2P (proven and probable) reserves 137 mmbbls and 3P (proven, probable and possible) at 391 mmbbls. Miller & Lents have also estimated the NPV (net present value) of the group’s 2P reserves on a pre-tax basis to be US$1.595 million, assuming a 10% discount rate and a peak production level of 45,000 barrels per day on 2P basis.

http://www.proactiveinvestors.co.uk/companies/news/18143/exillon-energy-raises-213m-for-russian-oil-projects-looks-to-cut-operating-costs-by-60-18143.html