Marifil Gets Independent Report on its Mina El Carmen Property
Marifil Mines Ltd. has received an independent report prepared by consulting petroleum geologist Carlos Reijenstein on the 20 square kilometer Mina El Carmen oil and gas property. The Company's wholly-owned property lies on the north flank of the Golfo San Jorge Basin and is about 30 kilometers north of the town of Comodoro Rivadavia, an important oil industry center in Chubut Province, Argentina. Marifil owns the hydrocarbon rights under its patented mining claims.
The Golfo San Jorge Basin encompasses parts of Chubut and Santa Cruz provinces and extends offshore onto Argentina's continental shelf. The basin has a total production in excess of 3 billion barrels of oil and produces about one-third of Argentina's annual output.
Private and government oil companies between 1928 and 1944, primarily to test a near-surface gas-bearing formation, drilled twelve shallow wells on the property. Four of the wells have shut-in gas and two of the deeper wells reported oil and gas shows from deeper reservoirs. Several factors sharply limited the value of this early testing, including lack of technical ability, lack of seismic coverage, the use of now obsolete technology and placing wells where access was convenient rather than based on geology.
During 2004/2005, on the adjacent Restinga Ali block (not owned by Marifil) new 3-D seismic programs as well as new geologic models led to several new oil discoveries by other companies. Oil and gas properties immediately to the west and southwest of El Carmen are currently producing 950 and 15,000 barrels of oil per day, respectively.
Marifil engaged Mr. Reijenstein to evaluate the Mina El Carmen property. This work included a review of nearby seismic lines, well logs, as well as preparation of structural/stratigraphic maps and cross sections to show the regional integration of the block with the main tectonic and stratigraphic features of this part of the basin. The results of his comprehensive study show that estimated potential resources associated with two prospective targets are on the order of 8.1 billion cubic feet of natural gas and 6.4 million barrels of oil.
These exploration targets, as initially defined, are five-kilometer long structural traps aligned along and against a northwest-striking fault. None of the 12 historic wells properly drilled tested these traps.
The Company discounts the value of the potential natural gas resource because natural gas is highly regulated in Argentina and sells for a significant discount to world prices. At current prices, the natural gas may not constitute an economic target. However, the potential oil resource does constitute an economic target.
Drilling to test the main oil exploration targets will require holes of about 800 m depth at an estimated cost of about us$400,000 per well.
Marifil purchased the El Carmen property several years ago, but continues its primary focus on precious and base metals projects. In keeping with Marifil's corporate business strategy, the Company intends to either sell the property or find an experienced oil and gas company as a joint-venture partner to develop this hydrocarbon property.
Carlos Reijenstein is a petroleum geologist/geophysicist with over 35 years of experience. He is a member of the Asociacion Argentina De Geologos Y Geofisicos Petroleros, the American Association of Petroleum Geologists, and the Society of Exploration Geophysicists and is very knowledgeable and experienced in the geology of the Golfo San Jorge Basin.