SHARES IN Dublin and London-listed exploration company Petroneft Resources lost close to a quarter of their value yesterday after the oil and gas company lowered its output target.

The company, which has interests in two licences in western Siberia in Russia, reduced its official production guidance for the first quarter of 2010 from 7,000-8,000 barrels of oil per day (bopd) to 4,000-5,000, with a target of 7,000 to 9,000 barrels estimated for the second quarter of 2013. The company is currently producing about 2,500 bopd, primarily from seven wells.

Petroneft fell 23 per cent, or 10 cent, yesterday on Dublin’s ESM market to close at €0.33, while in London it dropped 24 per cent to close at 29.50p.

Addressing the company’s agm in Dublin yesterday, chief executive Dennis Francis said positive results from the wells in the Pad 2 area had offset results from the western part of the Lineynoye field, mainly Pad 3, which was “lower structurally and has thinner pays”. The planned number of wells required from Pad 3 was to be reduced as a result of the thinner oil pays, limiting near-term production growth.

Responding to a query from one shareholder, who said they had been promised 4,000 barrels a day, Mr Francis noted that this was during the “pre-frac” period, referring to the fracture stimulation process. The company had “overpredicted” what the company would do with wells.

Chief executive Dennis Francis said the company remained confident in the longer-term reserve and production potential of licences 61 and 67.

Noting that the company was currently producing from less than 10 per cent of discovered reserves, he said this year’s exploration programme had the potential to double these reserves.