Volga Gas Slashes Output Forecast

London-listed Volga Gas announced July 17 it has slashed its production guidance.

The reduction follows high rates of water influx at the VM No.2 well and high levels of gas and water contact at the VM No.3 well. The wells are situated at the East-Makarov (VM) field in Russia’s southern Volga region.

Volga Gas said in a press release that its forecast for output beyond September has been lowered to 4,400 barrels of oil equivalent (boe)/day in light of the results, down from the current 5,900 boe/day. The company will also review and adjust estimates for remaining reserves at the VM field to account for the latest information. Preliminary analysis suggests a 20% reduction of the group’s total proven reserves as of January 1 will be necessary, it said.

"While disappointed by these results, production from the VM field continues as expected,” Volga Gas CEO Andrey Zozulya said. “Management is working hard to optimise the recovery of gas and condensate from the reservoir and is actively seeking opportunities to build sources of additional alternative production,” he added.