Gold Oil Wins Middle Magdalena Block
Gold Oil Plc has received confirmation from Agencia National de Hydrocarburos ("ANH"), the Colombian National Hydrocarbons Agency, that it has qualified as operator and license holder for the Rosa Blanca block in the northern part of the Middle Magdalena Basin, onshore Colombia.
The Rosa Blanca Block covers an area of approximately 45,000 hectares ("Ha") and is surrounded by the nearby oil producing fields of Cristalina, Santa Lucia, Tisquirania, Totumal, Baturama and the South Bolivar Block.
The most attractive oil play within the Rosa Blanca Block has a geological structural trap of a faulted anticline of 300 feet of vertical closure of 12,699 Ha, between 3,900 and 4,200 feet which Gold has interpreted to have the same geological signature of the nearby Buturama oil field. There are 232 kms of 2D seismic available to Gold over this prospect which ties into the nearby Norean 1 well. Gold believes that there are up to three other plays on this block.
The petroleum system within the Rosa Blanca Block has been proved in nearby oil wells and fields, reducing the geological risk significantly. Gold believes that the presence of the fractured reservoir zones within the reservoir rock is the main operational risk. Gold's clear objective is to find another Buturama oil field, which by analogy, could give reserves of up to 30 MM STB and initial production rates of 1,200 BOPD of 35 API gravity oil.
The main prospect is ready to drill to a depth of 5,000 feet with an expected drilling budget of $1.6 - $3.0MM, depending on testing and rig rates. Gold has 90% of the license but pays 100% of the costs. Gold's 10% partner is a local contractor who has extensive experience working in the Middle Magdalena Basin.
Under the terms of the agreement with our partner, he is carried through the drilling and testing of the first well, with the cost of the carry repaid to Gold out of future production revenues. Under the license terms with ANH a royalty of 8% is payable and corporation tax is levied at 35%.
Gary Moore, Gold's Managing Director, said:
"We are delighted to be awarded the Rosa Blanca Block following the lodging of our application to ANH in September 2006. The delay in Gold receiving confirmation of its successful application can be explained by the increasing competition from existing oil and gas companies and new entrants in Columbia. This high level of industry interest demonstrates the attractiveness of Colombia as an oil and gas province, with knock-on licensing delays at ANH due to the high volume of applications. Gold will now commence work with an environmental impact assessment, which will be carried out in parallel with selecting drilling locations and negotiating and securing the drilling contract to fast track the program."
Gold Oil plc is a UK oil and gas exploration company primarily focused on opportunities in Central and South America. The company has oil production in Spain and Colombia and significant exploration acreage and license applications, both onshore and offshore, in both Colombia and Peru.
- Gold Oil In Talks for Partner Offshore Peru (May 08)
- Gold Oil Granted License Extension in Peru (Jan 30)
- Gold Oil Extends Survey, Seeks Farm-In Candidates Offshore Peru (Jul 11)
Company: ANH more info
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