ERIELL Group Provides 2019 Operational Update and Projections for 2020

MOSCOW, March 31, 2020 /PRNewswire/ -- ERIELL ("the Company"), an international oilfield services group, provides an operational update for targets achieved in 2019 and projections for 2020.

Operational highlights include:

• Continued high-quality gas and oil field services to customers in Russia and Uzbekistan in both extreme cold and extreme heat conditions;
• 2019: 350 wells and 1.37 million meters drilled, fleet (work-over rigs excepted) 108 rigs
• 2020: 450 wells and 1.63 million meters expected to be drilled, fleet (work-over rigs excepted) 99 rigs
• 15th anniversary – a period in which more than 8.8 million metres of rock have been drilled and more than 2,6 thousand wells constructed in the most difficult climatic and geological conditions for more than 45 contractors;
• Intensive growth and new contracts in Russia and Uzbekistan; and
• A strong market presence and competitive advantage in the gas sector which is generally less volatile than oil markets in current circumstances.

Vitaly Dokunikhin, First Deputy Chairman of the Board of ERIELL Group and CEO of ERIELL Russia, said:

"We are very pleased with our execution as a team in 2019 and expect a good performance in 2020.

"We have a heavy involvement now in the gas sector where we have a competitive advantage and which experiences a bit less volatility than the oil sector.

"To maintain our place among industry leaders, ERIELL continues to invest in technology and innovation. This allows us to provide services of equally high standards in extreme desert climates, mountainous regions and permafrost zones. Our reputation rests on experience and the high level of expertise of our staff and this gives us a competitive advantage to design and execute our projects efficiently and responsibly.

"Whilst demand for our services is high in our home markets, we always remain open to new geographic opportunities such as the Middle East. We have good experience in Iraq and Bangladesh and when our capacity and the economics of projects align – we can move swiftly."

In 2019 the Company continued to provide quality gas and oil field services to its contractors and worked successfully to high standards in various geographies and climate conditions. These conditions ranged from extreme cold in the Russian far north to extreme heat in Uzbekistan. Last year projects were mainly concentrated in two countries: Russia (in the Far North in the Gydan Peninsula and the Yamal Peninsula) and Uzbekistan.

In Uzbekistan, ERIELL continued to work on a large-scale program to construct new wells, overhaul existing wells and create new technological facilities in support of a decree of the President of the Republic of Uzbekistan to increase hydrocarbon production for 2017-2021. In 2019 in the Republic of Karakalpakstan and in the regions of Kashkadarya, Surkhandarya, Bukhara and Andijan the Company completed the construction of and commissioned 114 oil and gas wells. In addition, the Company overhauled 79 wells in Surkhandarya, Bukhara-Khiva, Aral-Ustyurt regions and south-western part of Gissar region.

The largest and most complex project in 2019 in Uzbekistan was the Mustakillikning 25 Yilligi field, whose reserves are estimated at more than 100 billion cubic meters of natural gas, and last summer a new gas-bearing facility was opened. In 2019 was drilled the first test well, 7 wells are expected to be drilled in 2020.

In Russia, several new contracts commenced with primary customers NOVATEK and Gazprom Neft. Contracts for drilling production wells at the Kharbeyskoye, Severo-Russkoye, Zapadno-Yurkharovskoye and Utrennee fields were signed with NOVATEK and contracts for the drilling of E&P wells in the Zapadno-Yubileynoye, Tazovskoye and Yamburgskoye fields were signed with Gazprom Neft.

In 2019, an additional contract was signed with Arctic LNG 2 for the drilling of 59 wells at the Utrennee field. This will involve 3 Arctic drilling rigs in total: ZJ-70 DBS Aurora and two Uralmash 6000/400 Arctica lightweight. These are completely sheltered drilling rigs designed to work in the harsh Artic conditions. ZJ-70 DBS Aurora was mobilized from China to the Gydan Peninsula for 27 000 km and it took over 3 months. The first Uralmash drilling rig is already at the well site and is installing now, the second one will be mobilized by summer 2020.

An eight-year project with Achimgaz was completed, during the lifetime of the project the company has built and mastered 108 production wells at the Urengoy oil and gas condensate field. This project required the use of most advanced technologies and equipment of such international oilfield services companies as Halliburton, Baker Hughes, FMC Technologies, Marubeni-Itochu and others.

Cooperation continued with Arcticgas (a joint venture between NOVATEK and Gazprom Neft). This project is one of the Company's longest (over ten years) and is not only the most complex but also one of the most successful. To date, more than 180 wells have been drilled for Arcticgas and work is currently underway at the Urengoyskoye and Yaro-Yakhinskoye oil and gas condensate fields on the Achimov and Valanginian deposits, and

Several records were set at the Urengoyskoye field in 2019:

• Drilling a subhorizontal liner with a length of 1,500 meters for Achimov deposits in one flight (previously no other company has achieved a similar result);
• Drilling the deepest well in the region (final face 5881 m);
• A record for well construction for Achimov deposits, the lead was 1/3 of the planned time (plan - 65 days, fact - 43)

Notes to editors

• Founded in 2004, ERIELL is an international oilfield services group providing well construction and overhaul services to major oil and gas companies in Central Asia, the Russian Federation, and Middle East
• ERIELL works successfully with leading Russian and international companies, such as Rosneft, NOVATEK, Gazprom Neft, LUKOIL, Uzbekneftegaz, Gazprom International, Petronas, CNPC, MOLGROUP and others