Pan Andean has announced the successful completion of a critical new 2D seismic survey in the Antorcha Block. The block license is located in the prolific Middle Magdalena Basin of central Colombia. The license was signed in November 2007, after which Pan Andean accelerated an exploration program to confirm the block's prospectivity.
Additional seismic covering 70km has been reprocessed. Regional studies and surface geological work are also complete and have been integrated with the newly acquired data.
Pan Andean's team is working to identify the optimal locations for drilling and acquiring necessary drilling permits.
The Antorcha block neighbors an existing oil producing area, operated by the state petroleum company Ecopetrol, and is also adjacent to areas being explored or in production with several international operators.
Preliminary geological and petrophysical studies and the most recent data acquisition suggest potential for moveable heavy oil at shallow depths of less than 2,000 feet.
Between 1 and 2 billion barrels of oil in place could exist on the block, of which 100 to 300 million barrels may be recoverable reserves, using parameters of nearby fields: i.e. porosity 20 - 25%, oil saturation 60%, average net oil thickness of 100 - 200 feet, recovery factor of 10 - 15%. Expected crude quality could be in the range of 10 degrees to 20 degrees API, well within the economic processing capabilities of existing fiscal terms, technology and anticipated oil price.
Subject to confirmation of drillable targets and well rig availability, a limited drilling program will be undertaken in 2009.
David Horgan, Managing Director of Pan Andean Resources, commented, "This is a key step in Pan Andean's development. With the seismic and regional studies now complete, we can concentrate on drilling and finding quality partners. Pan Andean has already been approached by major oil players.
"This activity will illustrate what we believe to be the huge value locked in Antorcha. Obviously we hope that drilling will confirm the presence of commercially viable hydrocarbons. Farming out to a financially and technically strong partner will allow us to again demonstrate both the value in the block, and our desire to monetize the asset to the best advantage of our shareholders.
"We have long been impressed at the excellent fiscal terms available in Colombia, and good security in the Antorcha region. There are no community or environmental issues in what is a long established hydrocarbon producing area. Recent high profile transactions, as well as the 2008 Colombian Heavy Oil Round in which many majors took significant positions, confirm the potential and value being attributed to exploration and heavy oil opportunities in Colombia."
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