Gran Tierra has initiated exploration drilling operations on two oil prospects in Brazil and exploration drilling operations on one oil prospect in Colombia. Delineation and development drilling is ongoing in Colombia, with additional oil column identified in the Moqueta-6 delineation well.
"Two years after announcing a strategic decision to enter Brazil, Gran Tierra Energy has assembled a large land position and a diverse exploration and development drilling portfolio, with exploration drilling operations now initiated on two prospects, one onshore and one offshore. In parallel, our delineation and development drilling operations on recently discovered reserves in Colombia are ongoing, with exciting new delineation results indicating additional oil column in the Moqueta oil discovery. We have also begun additional exploration drilling on our lands in the Putumayo Basin of Colombia," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy.
BM-CAL-10 Block (Statoil 45% WI & Operator, Petrobras 40% WI, Gran Tierra Energy 15% WI)
Statoil do Brasil Ltda. ("Statoil") commenced drilling operations on October 1, 2011 on the 1-STAT-7-BAS exploration well. The well is located in the deepwater portion of the Camamu Basin at a water depth of 6,200 feet, directly offshore from Salvador and the onshore Recôncavo Basin where Gran Tierra Energy's operated acreage is located, and is expected to take 60 days to drill.
Documents associated with Gran Tierra Energy's two farm-in agreements with Statoil, whereby Gran Tierra Energy will be entitled to earn a 10% working interest in Concession Contract BM-CAL-7 operated by PetróleoBrasileiro S.A. ("Petrobras"), and a 15% working interest in Concession Contract BM-CAL-10 operated by Statoil, in the offshore Camamu Basin, are being prepared for submission to the Agência Nacional de Petróleo, Gás Natural e Biocombustíveis ("ANP") for regulatory approval.
REC-T-142 Block (Gran Tierra Energy 70% WI & Operator, Alvorada 30% WI)
Drilling of the 1-GTE-01-BA oil exploration well began on October 7, 2011. The well is located in Block REC-T-142 in the prolific onshore Recôncavo Basin. This operation is commencing with the drilling of a vertical pilot hole from which core will be acquired from the prospective reservoir section. The pilot well is planned to reach a total measured depth of approximately 6,070 feet and take approximately 35 days to drill.
Upon completion of the well and subsequent evaluation to determine if adequate reservoir is present, a drilling rig is planned to return late in 2011 to drill a horizontal sidetrack from the pilot hole at the optimum depth to test the productivity of the sandstone reservoir target. This will be the first of three horizontal wells Gran Tierra Energy plans to drill in late 2011 and continuing into the first quarter of 2012.
REC-T-129 Block (Gran Tierra Energy 70% WI & Operator, Alvorada 30% WI)
Drilling of the 1-GTE-02-BA oil exploration well is scheduled to begin in mid-October, 2011. This well is located in Block REC-T-129 in the Recôncavo Basin and is targeting two independent light oil reservoir targets. The well is expected to reach a total measured depth of approximately 6,400 feet and take approximately 35 days to drill.
Rumiyaco Block (Gran Tierra Energy 100% WI and Operator)
The Rumiyaco-1 oil exploration well began drilling on October 9, 2011. This prospect lies in the southern Putumayo Basin approximately 85 kilometers southwest of Gran Tierra Energy's existing producing properties, and between two existing oil producing trends. The well is expected to test a structural closure defined by 3-D seismic data at a total measured depth of approximately 10,700 feet and take approximately 45 days to drill.
Chaza Block (Gran Tierra Energy 100% WI and Operator)
The Moqueta-6ST1 delineation well in the 2010 Moqueta oil discovery reached total measured depth of 5,724 feet in basement after encountering oil shows in the Kg Sandstone, the U Sandstone, the T Sandstone and the Caballos reservoirs. The primary T Sandstone and Caballos reservoirs were encountered approximately 250 feet deeper than the equivalent reservoirs in Moqueta-5. Electric log interpretations and pressure gradient data indicate oil pay in the T Sandstone and Caballos reservoirs. A testing program is currently being designed to confirm the nature of the fluids and reservoir productivity of the sandstones.
Testing results are expected in approximately one month.
Sierra Nevada Block (Gran Tierra Energy 100% WI and Operator)
Drilling of the Brillante SE-2 delineation well is expected to begin late October, 2011. This gas field was discovered in 2010 and lies in the Lower Magdalena Basin in northern Colombia. This is the first of two delineation wells that are planned to be drilled in late 2011 and early 2012, with the intent to define adequate reserves to justify the construction of a gas pipeline and commit to long term gas sales contracts. The field is currently producing a nominal volume of gas which is transported by a third party utilizing compressed natural gas trucks. Gran Tierra Energy plans to increase this production to approximately 2 million standard cubic feet of gas per day before the end of 2011. The well is expected to reach total measured depth of approximately 6,000 feet and take approximately 25 days to drill.
Garibay Block (CEPSA 50% WI and Operator, Gran Tierra Energy 50% WI)
Drilling of the Jilguero-2 delineation well in the 2010 Jilguero oil discovery in the Llanos Basin of eastern Colombia is ahead of schedule. The well is expected to reach total measured depth of approximately 9,830 feet in mid-October.
Planning for the initiation of long-term testing of Melero-1, a new oil discovery made in 2011, is continuing, with first production expected in December.
"In summary, the fourth quarter of 2011 is going to be a very exciting time for our company, with exploration, delineation and development drilling results expected in Brazil and Colombia, and planning ongoing for a robust 2012 drilling program in those countries as well as in Peru and Argentina, all expected to be fully funded with cash and cash flow at current oil prices and production volumes," concluded Coffield.
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