Baraka's acquisition cost for its 20% interest in the Block is US$1.3 million for the firs US$5 million in work expenditure. Baraka's total expenditure to the end of the drilling of the Monza-1 exploraiton well is expected to be US$1.8 million. The acquisition will be funded from current cas reserves.
The Chicuaco Block is held under a Hydrocarbons Production and Exploration Agreement with the Colombian national oil & gas agency, Agencia Nacional De Hidrocarburos (ANH). The Block is located approximately 70 kilometers from the La Punta Oilfield in which Baraka has a participating interest and is in the vicinity of several producing oilfields including the prolific Rubiales oilfield.
Currently the operator of the Block is preparing for the drilling of the Monza-1 exploration well, which is scheduled to commence drilling as soon as December 20, 2007. THis well will target a number of intra-Carbonera, and Guadalupe reservoir objectives in a simple fault-dependant structure that has been identified using recently acquired 3D seismic. Un-risked recoverable resource for the Monza prospect is estimated by the Company to be in the range of 2-5 million bbls.
Estimated time to completion of the well is approximately one month. If successful, the well will be immediately production tested and will thereafter produce into temporary facilities until such time as permanent facilities are constructed.
Several other prospects and leads have been identified within the Block for possivle future exploration drilling. A number of these prospects are considered to be independent of the results of Monza-1. Total potential un-risked recoverable resource for the Block is estimated by the COmpany to be 5-20 million bbls.
Baraka's Managing Director Dr. Mark Fenton said:
"Baraka has continued to build on its business connections in Colombia. having already recently completed the La PUnta oilfield transaction, the acquisition of the Chicuaco Block in addition to having had several high quality opportunities offered to us recently demonstrates Baraka's developing business profile in the region."
"This acquisition will give the Company the opportunity to explore in an area surrounded by oil production and in a Block with several highly prospective independent exploration targets."
"The Company is continuing to review further acquisitions within South America focusing on near-field exploration, production and development opportunities of a financial dimension that can be accomodated by Baraka's existing cash and market capitalization."
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