Gran Tierra Energy Inc. announced that the company has initiated drilling Costayaco-2 in the Chaza Block, located in the Putumayo Basin of southern Colombia.
Costayaco-2 is the first of two delineation wells that will be drilled in the Costayaco field. Drilling is anticipated to take approximately one month with completion and testing operations to follow. The second delineation well, Costayaco-3, will be drilled in the first quarter of 2008 following completion of Costayaco-2.
The Costayaco oil field was discovered in the second quarter of 2007. The discovery well, Costayaco-1, tested a maximum of 5,906 barrels of oil per day (bo/d) from four reservoirs. The well has recently been producing approximately 2,200 bo/d from a single zone on natural flow with production trucked to the nearby Toroyaco facility. During this period, infrastructure at Uchupayaco, to handle new production, has been under construction. Testing of a jet-pump that will commingle production from two zones is currently under way.
Crude oil loading and unloading facilities for trucking operations from the Costayaco field to the existing pipeline network at Uchupayaco have been completed and trucking to this facility initiated. Planning for a 15-kilometer 8-inch production line from Costayaco to Uchupayaco is continuing. Construction of the production line is scheduled to start in March, 2008, and be completed in mid-2008.
The acquisition of 70-square-kilometers of new 3-D seismic data over the Costayaco field was completed in early December, and the data is currently being processed. The interpretation results from this data will be used for planning additional wells in 2008.
Gran Tierra Energy holds a 50% working interest and is the operator of the Chaza Block. Solana Resources Limited holds the remaining 50% working interest. The Chaza Block is subject to the new and fiscally attractive Agencia Nacional de Hidrocarburos royalty/tax contract which includes no additional state participation.
"The delineation drilling that we are now initiating will increase our production and greatly enhance our understanding of the full reserve potential of the Costayaco oil discovery," said Dana Coffield, president and CEO of Gran Tierra Energy. "These results, integrated with our new 3-D seismic data, will allow us to plan a full field development, including additional drilling, facilities and pipeline to handle additional production as appropriate through 2008."
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