Interoil made a strategic decision to discontinue drilling in Peru and Colombia during the summer of 2006, in order to integrate all previous geological information including what was learned during our very successful Q1 & Q2 2006 drilling campaign. We had then the full support from our technical subsidiary Proseis in Zurich that have been working closely with our local companies in Peru and Colombia to plan and execute the Q4 drilling campaign.
In Peru, we have drilled three wells in the northern portion of Block IV, the 'Bronco' area. All three wells have encountered oil. Two of the wells are producing in excess of 200bopd. The third well is producing 80bopd, which is more in line with expectations. The wells also indicate that the limit of the field extends further to the North & East, which will open for more drilling locations and increase our reserve base. We will continue to drill another 4 wells in this 'Bronco' area in addition to drill two wells towards the southern part of Block III this year. We are budgeting for drilling approximately 22 new wells in Peru for 2007.
In Colombia, we have drilled one new exploration well West of our main producing field, based on 3D seismic recently acquired. This well will be tested next week and the indications are very good. The 3D seismic and the new well, confirms the extension of the main producing field to the West, which again will add new drilling locations and add reserves to this field. All of the main reservoir sequences were encountered, oil filled. The 3D has also indicated a possible extension of the same field to the North, and our drilling rig in Colombia is now moved to this location for the final well this year. Drilling is expected to take 10 - 14 days. We are budgeting for another 10 wells to be drilled in Colombia during 2007.
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