Petrolifera Petroleum Limited has secured a new contract over the Puesto Morales Este Concession ("PME Concession") in the Province of Rio Negro, Argentina.
The PME Concession covers an area of 12.8 square kilometers (3,163 acres or approximately five sections) and is situated east of and is contiguous with the southeastern portion of the company's Puesto Morales Block in the Neuquén Basin, Argentina.
The negotiated contract is a one year Exploration License between the Argentinean branch of the company's subsidiary, Petrolifera Petroleum (Americas) Limited and Edhipsa, the provincial oil company of Rio Negro. The Exploration License can be converted into a 25 year production license upon the establishment of commercial production. The royalty rate has been established at 24 percent.
Under the terms of the contract, Petrolifera is committed to the drilling of a minimum of two exploratory wells, each to a minimum depth of 1,500 meters, additional optional 3D seismic and other obligations, including some agreed training costs for Edhipsa personnel. The total amount of the negotiated work commitment has been calculated at US$10.6 million.
Petrolifera advised that drilling is already underway on a seismically-defined structure on the block. The PME X-1001 well, which is currently at a depth of 189 meters, is targeted to be drilled to a projected total depth of 1,640 meters to evaluate various formations, including the Sierras Blancas Formation, which is the prolific producing zone at Puesto Morales Norte.
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