This total comprises approximately 1,290 barrels of oil per day (bopd) and 955 thousand cubic feet of gas per day.
This increase is reflective of new production from the Juanambu and Costayaco oilfields discovered in the first half of 2007. Staged field development programs on both fields have been initiated which should allow for continued production growth through 2008.
Located on the Chaza Block, Putumayo Basin, first development stage trucking of Costayaco-1 production to existing facilities has been implemented. Costayaco-1 has been averaging approximately 1,750 bopd gross since September 10 (805 bopd net of royalties to Solana) on natural flow from selected zones. Costayaco-1's production rate is currently limited by trucking capacity.
The first development stage also includes drilling two development wells commencing late in the fourth quarter of 2007 and continuing into 2008. To assist with future development drilling location selection, a 70 square kilometer 3-D seismic program, covering the entire field, has also been initiated and will be completed by the end of the fourth quarter of 2007.
Additionally, a ten kilometer eight inch pipeline, tying into existing infrastructure, is being designed to replace trucking operations. This pipeline will have sufficient capacity to handle estimated full field development volumes, although initial throughput will be limited to existing infrastructure capacity, which is estimated at 5,000 to 6,000 bopd. This line is anticipated to be operational in the second quarter of 2008. A second stage of development drilling and infrastructure construction will be contingent on the results of these initial wells.
A staged development program is also being implemented at Juanambu in the Guayuyaco Block, which is directly east of the Chaza Block in the Putumayo Basin. Production testing has been completed and the application process for commerciality is continuing. A six kilometer six inch flowline tying Juanambu-1 into existing infrastructure is being designed and should be operational by late fourth quarter 2007. A second stage of development drilling and infrastructure construction is being evaluated for 2008.
Mr. Glenn Van Doorne, Chief Operating Officer of Solana, a Petroleum Geologist, is the qualified person who has reviewed the technical information contained in this news release.
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