(MENAFN- ProactiveInvestors - Australia) Zeta Petroleum (ASX: ZTA) will see an improvement to the economics of its Romanian projects after the Government put in place legislation to deregulate its domestic gas market.
Under the new Energy and Gas Law No. 123/2012, regulated prices for end clients will be gradually eliminated with the changes taking effect for non-household clients from 1 December 2012 and from 1 July 2013 for household clients.
"Zeta has long been attracted to Romania given its favourable and stable fiscal regime, proven hydrocarbon system and long established oil and gas industry," managing director Stephen West said.
"The announcement of the official conversion into Romanian legislation of the EC directive supports our strategy to invest in Romania as we expect domestic gas prices to commence converging with Western European prices from early 2013."
Gas prices in Romania currently average about US$4.25 per thousand cubic feet though West had previously said that deregulation could send prices up to about US$10.50 per thousand cubic feet, more than doubling its future revenue.
Bobocu gas field
Zeta has started its six well drilling aimed at bringing the Bobocu gas field back into production with the spudding of the Bobocu 310 appraisal and development well earlier this week.
The program targets identified mean contingent gas resources of 44.8 billion cubic feet (Bcf) of gas, or 7.71 million barrels of oil equivalent (MMboe), along with mean prospective gas resource of 68.73Bcf or 11.82MMboe.
This is based on the company's understanding of the geology and distribution of hydrocarbons across the field from the extensive technical studies, geological modelling and a 75 square kilometre 3D seismic survey that it carried out.
Additional potential that was identified in shallower and deeper horizons will be evaluated during this program.
Any gas discovered will find ready buyers in both Romania and the broader European market, where there is a shortage of gas supply.
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