This concession covers approximately 90,000 acres and engineers have assigned in excess of 500,000 barrels of oil as proved producing reserves and over 7,400,000 barrels of oil as proved undeveloped reserves. In addition to the existing producing well, the Company expects to drill as many as three development wells offsetting existing production with the first well expected to be drilled in March.
"This project is custom-tailored for our goals," stated John F. Terwilliger, President of Houston American Energy Corp. "Based on current production rates and oil prices, we believe that this acquisition will add approximately $120,000 of cash flow to the Company in 2003. This acquisition is a very important step forward for our Company."
In addition, the Company has signed an agreement with its industry partners in this concession that provides for each to participate for a 12.5% interest in each other's new projects in Colombia at cost. The term of this agreement is five years. Management believes this will provide the Company with a number of additional opportunities in Colombia on a ground floor basis.
The Company's first well on its Cara Cara Project in Colombia has been tested and is expected to go on production in a few weeks after the surface and production facilities are in place. Management will release detailed results once production has been established.
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