PrimeGen Energy Corp has advised that as part of the recently announced participation agreement regarding the Company's oil and gas project in Timan-Pechora, Russia, the operator has notified PrimeGen that drilling of a second well commenced on July 10, 2009.

The second well, the "Kochmesskoye-2" is estimated to reach a target depth by Wednesday, July 22nd and as part of the accelerated drilling program a third well is scheduled for immediate drilling shortly after the completion of the second well.

The first well of the project was drilled and completed in the second quarter of 2009 and resulted in setting a new production record for the field of 1,200 barrels of oil per day. PrimeGen expects that an additional 5-8 wells will be drilled during the third quarter of 2009.

The Timan-Pechora Project area currently consists of 24 existing production oil wells with close to one billion barrels and 132 BCF of proven reserves. A discovery well tested 5,589 BOPD from zone at 3,958-3,974 meters.

The Timan-Pechora region is 17 kilometres from Ukhta, a major town in the Republic of Komi. The oil plays are situated approximately 1,200 km from Moscow. Its surrounding areas have well established infrastructure, allowing all year access for field operations.

Power lines and a major highway pass through the territory. There is also a branch of the Transneft pipeline between Ukhta and Moscow that passes directly over the project. Additional transportation routes include a railway system, with the nearest terminal located close to Ukhta.

The area is a well documented and prolific region benefitting from the presence of established companies such as TNK-BP and Komineftegaz. The participating property has over 24 wells currently in production, from which PrimeGen's interest will result in immediate cash flow for the Company.

Company President Robert Charlton comments, "We are very pleased to see the positive results of these wells and feel we are well down the road to achieving our production targets on this field. PrimeGen's mandate has been to aggressively pursue reserves, production and cash flow growth through strategic investment in production, development and exploration assets with a primary focus on opportunities in Russia. We have successfully built a platform for growth with our Russian assets."

Tags: PrimeGen Energy