Twenty-six wells have been drilled in the offshore Caribbean since the 1940s, with most of the wells drilled in the 1960s and 1970s. Hydrocarbons were detected in 10 of the wells; in three of these, oil flowed to the surface from the shallow Eocene formation, including a well drilled by Shell in the late 1960s. This well is located within the area awarded to Infinity.
"In my nearly 25 years as an explorationist, this is clearly one of the most exciting exploration plays," commented Jeff Roberts, Exploration Manager for Infinity. "The acreage awarded not only offers play potential in the Eocene, but also in the deeper Cretaceous formation."
The Nicaraguan Caribbean Shelf is surrounded by areas with major Cretaceous discoveries. In Venezuela and Colombia, world-class giant oil fields are producing from the Cretaceous formation. To date, no Nicaraguan well has penetrated the Cretaceous formation. The Cretaceous is visible or outcrops onshore in Nicaragua and includes a rich source rock similar to that found in Mexico and Venezuela.
According to Roberts, "The older seismic data was unable to image this structurally complex area. Recently acquired data will allow us to identify opportunities in both the under-explored Eocene section and the unexplored Cretaceous formation. The opportunity to find world-class reserves exists on the acreage awarded to Infinity and, with two million acres, we are posed to capitalize on any discoveries found in the course of our drilling program."
Negotiations to finalize the awards are expected to begin next month. After the contracts are finalized and an environmental impact assessment has been completed, Infinity will commence operations. The work program for each contract area is divided into multiple phases -- an initial seismic phase and one or more discretionary drilling phases.
Infinity has been actively seeking opportunities in Nicaragua for approximately four years. Ross observed that "the economic terms available today in Nicaragua make this award particularly attractive. We acquired 100 percent of this play for good reason," he added.
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