TIDMPELE
RNS Number : 5511W
Petrolatina Energy PLC
22 November 2010
22 November 2010
PetroLatina Energy Plc
("PetroLatina" or the "Company")
Operations Update
Colon-3 Sidetrack, Santa Lucia-5 and Querubin-1 Wells
Drilled
PetroLatina (AIM: PELE), the independent oil and gas
exploration, development and production company focused on Latin
America, announces an operations update on its activities in
Colombia.
Highlights:
-- Six wells drilled in the year to date
-- All commitment wells required to be drilled under the terms
of the Tisquirama licence extension have now been completed; future
wells will therefore generate a higher proportion of revenue for
PetroLatina
-- Gross production of 562,180 barrels of oil ("bbls") (2009:
382,236 bbls) and Net production of 261,693 bbls (2009: 167,920
bbls) at an average gross rate of 1,849 barrels of oil per day
("bopd") (2009: 1,257 bopd) and an average net rate of 861 bopd
(2009: 552 bopd) in the 10 months to 31 October 2010
-- Zoe-1 well, previously announced to have tested tar and water
from the Lisama formation, was recently placed back on test and
produced 889 bbls of 23 degree API oil over an 8 day period on very
small choke sizes with essentially no water
-- Santa Lucia-5 well on stable production of 110 bopd of 15
degree API oil
-- Querubin-1 well producing 200 bopd of 14 degree API oil
-- Serafin production facilities completed - initial gas sales
expected by the end of this year
-- Updated independent reserves report expected to be received
by the end of this year
La Paloma Block
Colon Field
Colombia's hydrocarbon regulatory agency (Agencia Nacional de
Hidrocarburos ("ANH")) has now formally approved the Company's
commerciality application for the Colon field thereby initiating
the 24 year commercial production period and enabling the potential
full development of the field.
Arcis Seismic Solutions ("Arcis"), a leading Calgary-based
seismic reprocessing specialist has been contracted to provide high
resolution seismic reinterpretation including re-processing the
data of the Colon field. This study is nearing completion, will be
completed by the end of December, and will allow enhanced imaging
of the oil productive sands on the Colon field including the thick
channel sand drilled in the Colon-3 sidetrack well. It will provide
a basis for planned future development drilling to be undertaken in
2011. PetroLatina holds an 85% interest in the La Paloma block and
the Colon field.
Colon-3 st-1 development well
The Colon-3 sidetrack well was drilled to a measured depth of
10,000ft, logged and completed. It intersected a 78ft (gross) thick
and previously unknown channel sand and this zone swab tested 5
barrels of 25 degree API oil with essentially no water. The Arcis
seismic study is intended to assist in defining the extent and
shape of the channel. An acid/frac job is now also being planned
for this zone to determine whether it can be produced at commercial
rates at the current location.
The main target sands, currently producing in the Company's
Colon-1 and 2 wells, were also perforated and tested over the
period 24-29 September with a recovery of 100 barrels of 21.7
degree API oil and essentially no water. Production testing
continues in order to establish a stable rate and to facilitate the
design of an appropriate pumping programme.
Exploration activities on the La Paloma Block
A 2D seismic programme is currently planned to be shot in the
first quarter of 2011 to detail the El Juglar prospect in
anticipation of drilling in the second half of 2011.
Midas Block
Zoe-1 Well
The Zoe-1 well, previously announced to have tested only tar and
water from the Lisama formation, has been shut in for five months
pending the completion of engineering studies. It was placed back
on test production in early November and produced clean oil with no
water via the annulus. A total of 889 bbls of 23 degree API oil
were produced over an 8 day period on very small choke sizes (5/64
to 8/64 inches). The well will now be intermittently produced and
shut in to allow pressure build up and enable an optimum pump
configuration to be determined. The Company holds an 85% interest
in this well.
Chuira Field
The Chuira-1 well has achieved cumulative production to date of
approximately 13,651 bbls and production continues at a stable rate
of 30 bopd of 22 degree API oil with no water and no decline. The
well initially produced at a rate of up to 187 bopd from two La
Luna limestones; however, shortly after it was placed on
production, the lower and better quality limestone, with more than
10% primary porosity plus natural fractures, was choked off by
gilsonite, a form of hydrocarbon which is in a plastic state at
reservoir conditions. Subsequent engineering studies have focused
on defining a sidetrack location for this well. Accordingly, the
Company commissioned a study from Landocean Energy Services Inc.
("Landocean"), a Houston based group which specialises in seismic
studies of naturally fractured reservoirs. This study, involved
comprehensive seismic reprocessing, fault orientation and density
analysis and formation fluid studies and has provided a good basis
for the planned redrill to be undertaken in 2011. The Company holds
an 85% net interest in the Chuira discovery.
Seismic Programme on the Midas Block
A 40 sq. km. 3D seismic programme is planned for December 2010
in order to detail a previously defined prospect in the central
part of the Midas block, with possible drilling at the end of
2011.
Tisquirama Association contract
Querubin-1 exploratory well
Querubin-1, recently drilled and the first well to be completed
with a progressive cavity pump, continues to perform better than
any other well in the Los Angeles field. This well is almost a twin
of the Los Angeles-2 well which was drilled in the mid 1980's and
which was abandoned prematurely due to sand production problems
following the production of only a small quantity of oil.
Querubin-1, conversely, is currently producing problem free at a
rate of approximately 200 barrels per day on a restricted pump
speed. The pump speed is slowly being increased and the well is
believed to be capable of producing at a rate of up to 230 barrels
per day. The pressure was less depleted at Querubin-1 than
expected, which supports our plan to drill additional infill wells
in this portion of the field. The Company holds a 25% interest in
the Querubin-1 well and the surrounding area.
Santa Lucia-5 well
Santa Lucia-5, the final commitment well, was drilled in the
south eastern part of the Santa Lucia field in order to drain the
south lobe of the structure. The well found a 26ft (gross) oil
bearing sandstone, as expected, in the Eocene la Paz formation.
Current production is stable at a rate of approximately 110 barrels
of 15 degree API oil per day with a 50% water cut. The Company
holds a 20% interest in this particular well.
Los Angeles and Santa Lucia - Installation of Additional
Electricity Supply
Production at the Los Angeles and Santa Lucia fields has been
significantly hampered over the course of the past year due to the
almost daily failure of the local electricity company to supply
adequate power for the Company's production pumping units. For that
reason, the Company is currently installing its own generation
facilities in the Los Angeles and Santa Lucia fields. These
facilities are expected to become operational in the second quarter
of 2011.
Serafin production facilities
The production facilities and production gateway for the
Serafin-1 gas well have now been completed and an isochronal test
is expected to begin within the next two weeks. Gas sales are
currently anticipated to commence within the next month.
New Workover Rig
The Company has now received approval from its partners for the
purchase of a workover rig and expects to have such a rig in
operation in the first quarter of 2011. This planned acquisition is
expected to significantly reduce rig rental costs and decrease the
amount of down time in connection with well maintenance.
Putumayo-4 Block
A 103 kilometre 2D seismic programme is currently planned for
the Putumayo-4 block. This will be shot in the first quarter of
2011 and will target several known leads. The Company holds an
operating 50% interest in the Putumayo-4 block.
Middle Magdalena Block-VMM 28
A geological review of this recently acquired block is now in
progress. Preliminary meetings have been held with Royal Dutch
Shell, which acquired the adjacent block in the recent bidding
round, to determine whether the two companies should co-operate in
the exploration of these areas. The VMM28 block is thought to be
highly prospective for sands of the type which produce in the
adjacent Colon field, for channel sands seen in the Colon-3
sidetrack and for unconventional reservoirs. The Company currently
has a 100% interest in this block.
Work Programme for the remainder of 2010
-- Completion of Serafin-1 gas well hook-up and commencement of
commercial production
-- Establish commerciality of the Querubin area with our
partners, Ecopetrol S.A. and Petrosantander (Colombia) Inc.
-- Completion of an updated independent reserves report by Ryder
Scott Company, L.P.
Proposed Work Programme for 2011
-- Shoot 2D seismic and drill the first exploration well on the
Putamayo-4 block
-- Drill the Juglar-1 exploration well on the La Paloma
block
-- Commence the Company's full development programme for the
Colon field based on the results of the Arcis seismic study
currently in progress
-- Conduct development drilling in the Querubin area
-- Undertake a sidetrack for the Chuira-1 well based on the
fracture study produced by Landocean
Juan Carlos Rodriguez, Chief Executive of PetroLatina,
commented:
"The completion of the first round of our commitment and
exploration drilling during the past two years has achieved very
encouraging results in terms of production rates and reserve
volumes. The information gained has now been studied with the
support of external specialist consultants and is currently being
integrated into our geological models. This should allow us to
resume development drilling in 2011 in a more effective and low
risk manner and consequently, since the commitment phase, during
which we were obliged to pay a disproportionate share of the costs,
has now ended, we expect to be able to enhance profitability in the
years to come."
Mr Menno Wiebe, a Non-executive director of the Company, has
reviewed and approved the technical information contained within
this announcement in his capacity as a qualified person, as
required under the AIM rules. Mr Wiebe is a Petroleum Geologist and
has been a Member of the American Association of Petroleum
Geologists for more than 30 years and a Member of the Geological
Society for more than 7 years.
Enquiries:
PetroLatina Energy Plc Tel: +57 1627 8435
Juan Carlos Rodriguez, Chief Executive Officer
Pawan Sharma, Executive Vice President - Tel: +44 (0)20 7766 0081
Corporate Affairs
Strand Hanson Limited
Simon Raggett / Matthew Chandler Tel: +44 (0)20 7409 3494
Evolution Securities Limited
Rob Collins / Chris Sim Tel: +44 (0)20 7071 4304
Financial Dynamics
Ben Brewerton / Susan Quigley Tel: +44 (0)20 7831 3113
This information is provided by RNS
The company news service from the London Stock Exchange
END
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