Peruvian engineering and consulting company Companía Consultora de Petroleo (CCP) was awarded a concession for the block in March 2004 and has a 30% farm-out arrangement with Ziegler.
Radial aims to sign a formal agreement with Ziegler before May 5, Lyons said.
The company plans to drill the first well from September-October 2006 and begin production by year-end, Lyons said.
Radial will invest US$1.65mn in drilling the first well, which includes the purchase of its own shallow drilling rig, Lyons said.
The company will then decide whether to drill a second well with an expected investment of US$1.65mn that will include storage, pipeline and infrastructure.
Each of the wells will take less than a week to drill, Lyons said.
The block, in the Ucayali basin, has the potential to produce up to 20 million barrels of oil. Radial has contracted US appraisal firm Gustavson and Associates to assess the block's reserves.
A test well drilled on the block produced oil with API grade 37. Tests indicate that initial production rates on the block will be 200-800 barrels a day (b/d) on each well with a potential for 41 well locations.
"What's really exciting about it is it's very shallow and a perfect analog to the Maquila field operated by [US company] Maple, and has all the signs of success," Lyons said.
This acquisition provided the company with the opportunity to enter into a concession that already has the necessary seismic work, environmental approval and social permits and is ready to be drilled, Lyons added.
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