PetroLatina announced a production update in respect of the first quarter of 2011.
The Company achieved total gross production from its Tisquirama, La Paloma and Midas license blocks located in the Middle Magdelana Valley, Colombia, in the three months to 31 March 2011 of 193,790 barrels of oil (bbls) (2010 equivalent period: 155,323 bbls) and total net production of 90,536 bbls (2010 equivalent period: 72,465 bbls) at an average gross production rate of 2,154 barrels of oil per day (bopd) (2010 equivalent period: 1,726 bopd) and an average net production rate of 1,006 bopd (2010 equivalent period: 805 bopd).
As announced previously, the Serafin-1 gas well located in the Company's Tisquirama license block is currently on an extended 6 month production test at a flow rate of 5.5 MMscf/d of gas and a well pressure of 1,850 pounds per square inch (psi). The well has, during the test period to date, achieved total gross production of 95.98 MMscf of gas (15,997 barrels of oil equivalent) and total net production of 44.15MMscf (7,359 boe). Gas produced during the 6 month extended test period is being sold to Ecopetrol S.A. at 90% of the regulated price for Texaco for Barranca-Ballena's gas (as regulated by CREG, the Regulatory Commission of Energy and Gas of Colombia). The regulated price is currently $4.2562/million British thermal unit (BTU). The Serafin-1 well is jointly owned by PetroLatina (50%) and PetroSantander Corporation (50%).
The Company expects to release the results of an updated independent reserves report commissioned from Ryder Scott Company, L.P. and various geological and petrophysical studies during the current quarter.
Juan Carlos Rodriguez, Chief Executive of PetroLatina, commented, "Our first quarter average production rates and the initial results to date from the Serafin-1 gas well have been very encouraging and in line with our expectations. We continue to pursue our strategy of seeking to increase production and reserves and expect to resume our development drilling in a more effective and low risk manner later this year."
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