The Company has committed to an option to a second earning program in the Capricorn license consisting of a 3D seismic program of up to 150 square kilometers and the drilling of two wells in different structures in the Estacion Pizarro Area in the southern portion of the Capricorn license area. Under this earning program, the Company will earn a 25% interest in the Estacion Pizarro Area by funding 50% of 150 km2 3D seismic program and the cost of two exploratory wells. The cost of the seismic data acquisition program is estimated at US$750,000 to the Company. Seismic data acquisition is slated to commence in Q3-07, and drilling is scheduled for Q2-08. The Estacion Pizarro Exploration Program was developed by APCO, the operator of the Capricorn license, based upon a combination of 2D seismic and geologic data that indicates the presence of two structures that represent potential traps for oil in the Yacoraite sandstone reservoir.
The Company has declined to participate in a separate earning option that it has in the northern portion of the Capricorn block to join in an exploration program for gas in the Devonian. Management decided this program was not consistent with the strategy of the Company at this time.
The Capricorn License is strategically located along an oil-producing trend in the Yacoraite sandstone. It is situated adjacent to the Puesto Guardian Block that has had cumulative oil production of 14.7 MMBO from the upper Cretaceous Yacoraite in five fields. Reserve estimates maintained by the Argentine Secretariat of Energy indicate remaining recoverable reserves for the Puesto Guardian Block are 2.8 MMBO. The Company's strategy is to utilize 3-D seismic to guide a drilling program in search of any extensions of the hydrocarbon bearing Yacoraite sandstone onto the Capricorn License.
Antrim Argentina S.A. is a wholly owned subsidiary of Antrim Energy Inc.
APCO Argentina Inc. is majority-owned by The Williams Companies, Inc.
GP Energy, a member of the Grosso Group, is engaged in the development of oil and gas projects in North and South America.
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