March Resources Corp. announced that the Pica #2 well was drilled, on the Pica North block in Chile, to a total depth of 2,700 meters and has been logged. No increase in background gas readings was observed during the drilling operations and logs confirmed that there were no hydrocarbons present. The well is currently being abandoned.
The Pica #2 well drilled into thin shale beds 175 meters higher than anticipated. However, the shale at this location was silicified and as a result, not capable of generating any gas. In addition, this silicification of the shales and sands at this location likely inhibited vertical movement of any gas into the shallower sediments, similar to what was observed in the Pica #1 well.
March believes the structure into which the Pica #1 and #2 wells were drilled represents a near shore, Jurassic aged peninsula, this would explain the thin nature of the shale beds encountered at Pica #2. It is likely that these shales will thicken deeper in the basin and as a result, March has identified and prepared its third exploration drilling location, Challacolla #1. This well is in a separate structure that is expected to be deeper into the Jurassic basin. This new location is in close proximity to surface exposures where much thicker, non-silicified shales were observed with high total organic carbon contents, which is a prerequisite for the presence of shale gas. March plans to spud this well in July.
Furthermore, March believes that gas was observed in certain intervals in the Pica #1 well. These intervals, which were tested with a perforating unit, comprise the shallower Cerro Empexa and Guatacondo Formations. Gas in these intervals is believed to be sourced from the Majala Formation black shales, which remain the target in the third exploration location. March has also confirmed that one or more of the zones above the gas bearing intervals that were perforated in the Pica #1 well are water bearing. The water from those zones likely drowned the zones that flowed gas to surface and where a significant pressure build-up was observed. March will attempt to isolate the wet zones in an attempt to re-establish gas flow.
March has a 100% interest in both the Pica North and Pica South Blocks which in total cover 2.5 million acres.
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