It should be noted that the Sierras Blancas Formation remains to be tested in the 1010 well; this formation has yielded prolific flow rates on test in other offsetting wells.
The RN.PM.a-1011 well, which is located to the east of the 1003 discovery well, has been logged and cased as an indicated multi-zone crude oil discovery. This well will be tested utilizing the new service rig which has been secured after operations are completed at the 1010 well. Thereafter, testing of the 1005 well, an indicated Quintuco discovery, will be undertaken.
The drilling rig which was used to drill the six discovery wells for Petrolifera has now been released to another operator. Petrolifera will utilize the upcoming period to complete its testing programs and to incorporate the technical data obtained from its drilling and testing program into its geological and geophysical models, while finalizing its determination of the scope and nature of its facilities requirements.
Efforts will continue to contract and secure a new drilling rig so the company can commence its anticipated 24 well drilling program by the beginning of the second quarter 2006, or sooner. As disclosed, Petrolifera anticipates a 2006 capital budget of $32 million for Argentina and Peru.
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