The company recently announced that it has entered into an agreement by which, subject to shareholder approval, Petro Rubiales Energy Corp. will combine on a market to market basis with Pacific Stratus through a court approved plan of arrangement, with the combined entity to be renamed "Pacific Rubiales Energy Corp." Pacific Stratus shareholders will receive 8.85 common shares of Petro Rubiales for each share in Pacific Stratus. The exchange ratio represents a market-to-market transaction based on the agreed 10, 15 and 20-day volume weighted average price of the two companies.
During the quarter the company completed the auction to sell 34,807 million British Thermal Units per day (MBTUD) of natural gas that will be produced at the La Creciente Field from the extended well tests at Prospect A. The price for the total amount of gas negotiated through the auction averaged US$ 3.72/MBTUD.
At the La Creciente block, the drilling of the third exploratory well was completed reaching a Final Depth of 12,950 feet. The well was tested through two Drill Stem Tests which indicated a production potential of 32.7 million cubic feet per day (mmcfd) with a 32/64 inch choke, slightly higher that that measured at the LCA-1 well, which measured 29.1 mmcfd with the same choke.
In this quarter the Company started the seismic acquisition programs at the Guama Block in the Lower Magdalena Basin and at the Moriche Block in the Llanos Basin of Colombia. As well, at the Arauca Technical Evaluation Area, 2,000 kms of existing seismic have been sent to be reprocessed.
Finally, the company spudded well LCD-1, located at La Creciente on Prospect D, and it is planning to reach the top of the Cienaga de Oro reservoir at 10,583 feet toward mid-December 2007.
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