Under the new terms of the MOU, the partners have been granted an extension to June 22nd to sign a formal Share Purchase Agreement ("SPA") and deposit an escrow in favor of Rancho Hermoso. The closing date for the transaction is set for July 31st. The new partner will provide 100% of the escrow and pay 100% of the acquisition. In return, Radial will earn, after closing, a 10% working interest in a joint venture company holding 100% of Rancho Hermoso shares.
Rancho Hermoso S.A. is a privately held Colombian oil production company and operator of two oilfields located in the Casanare department of Colombia. The Rancho Hermoso and Entrerrios fields are geologically located in the Llanos Basin, one of the most prolific hydrocarbon producing areas of South America, which includes the giant Cano Limon and Cusiana/Cupiagua fields.
Radial also announced that the Huaya 2X well was tested in the Middle and Upper Vivian formations, with the commencement of operations on June 15th. The Middle Vivian was perforated at 275-276 meters true depth and flowed fresh water at a calculated rate of 270 barrels per day. The Upper Vivian test was completed on June 15th from perforations at 255.3-257.2 meters, recovering 65 barrels of fresh water during the 12 hour test period, plus 3 liters of 35 API gravity oil from the formation. The free flow rate was 330 barrel of fluid per day.
The operator is preparing to move to the Huaya 1X well to finish the completion of that well and perform a production test. The 1X well reached final total depth of 282 meters on March 17th. The well encountered the primary target Vivian Sandstone at 246 meters and the operator reported an oil bearing zone from 246 to 252.2 meters with strong, flowing, bright yellow oil fluorescence in the drilling mud, a gas show of 120 parts per million (ppm) over background gas of 30 ppm, and neutron density log interpretation indicating potential hydrocarbons. The operator is also preparing to conduct shallow stratigraphic tests to assist in determining the proper orientation and updip direction of the Huaya structure to guide further development.
According to Radial CEO, Leigh Lyons, "We are pleased to be moving forward with our new partners to acquire Rancho Hermoso and, after closing of the deal, look forward to the Company's first significant cash flow from operations and to further development of the two existing fields." He added, "We remain optimistic that the planned Huaya 1X well production test will reinforce our commitment to this project, which Radial has fully funded for the drilling of the first three wells and production facilities. The 1X well had oil shows to surface during drilling and is higher on the structure than the nearby Huaya 4X well which tested oil in the mid-80s. Radial and its partners are focused on finding the top of the structure and developing this oil play."
Radial Energy identifies, acquires, and develops low risk oil and natural gas exploration and development opportunities throughout the Americas.
Most Popular Articles
From the Career Center
Jobs that may interest you