The contract is with Quintana WellPro S.A. and the rig is expected to commence drilling operations in the second quarter of 2007. Antrim has a 25.78% interest in the Tierra del Fuego licenses.
In the interim period, testing, completion and stimulation operations in the area continue using a joint venture-owned completion rig. Fracture stimulation treatments using this rig have been particularly successful. To-date five wells drilled have been stimulated resulting in increased flow rates of between 50 barrels of oil per day ("bopd") and 170 bopd. Two wells (LV 1 and LVx 3) drilled and shut-in prior to the current drilling campaign have also been stimulated resulting in new oil production of 170 bopd and 50 bopd respectively.
Drilling results, based on extensive 3D seismic, have proved the Tierra del Fuego licenses to be an oil and liquid-gas rich resource area. To-date Antrim and its partners have drilled 18 successful wells out of 19. Initial flow rates from the first four wells in the program were 12, 14, 3 and 10 million cubic feet per day ("MMcf/d") plus associated natural gas liquids (propane and butane) and condensate. Longer-term multi-rate flow tests from these wells flowed at rates of 24, 24, 2 and 18 MMcf/d plus associated liquids. In July 2006, Antrim began to deliver a portion of this gas to the San Luis gas plant in Argentina through a newly completed 10 km high pressure gas pipeline.
Over the past five months the focus has been on recent oil discoveries, particularly in the Los Patos license area, where 4 new wells have been drilled. These wells intersect the oil column in the Springhill Formation where rates of up to 345 bopd have been tested and announced. The limits and development of this new oil pool will be at the centre of the current testing program, new 3D seismic and the renewed drilling campaign in 2007.
Antrim and its partners will also continue to evaluate candidates for re-entry and stimulation, given the initial success in stimulating several wells previously drilled on the license.
A large number of locations have yet to be drilled based on the 3D seismic program acquired in 2005. However, a new 3D seismic program is planned for 2007 and is expected to add substantially to the existing inventory of oil and gas targets. Additional drilling equipment may be sourced to take advantage of the expanded area covered by 3D seismic.
Based on several very large producing gas and condensate fields offshore on the same trend as Tierra del Fuego, the Company believes there is also the potential for additional oil and gas discoveries in the offshore area covered by its licenses (3km from the coast). The Company and its partners are currently investigating the possibility of acquiring additional seismic data for this area.
Commenting, Stephen Greer, Antrim's CEO, said:
"Antrim is very pleased to have a long term drilling contract which will dedicate a rig to this area for at least two years. The three Tierra del Fuego licenses continue to deliver exceptional results and future drilling will concentrate on oil targets which have the potential to yield immediate cash flow to Antrim."
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