Petro Vista Energy has successfully completed the acquisition of the remaining 47.8% working interest in its Morichito Block from Eagle Transport Ltda. The Company now owns 100% of the oil and gas exploration and production rights over the Morichito Block through its Colombian subsidiary, Petropuli Ltda.
The Morichito Block
The Morichito Block is located in Llanos Basin, Colombia and comprises 57,252 gross acres. The Company estimates a net potential production of 2,100 bopd (approximately 600 bopd from the completion of an existing discovery and approximately 1,500 bopd from an exploration well).
Extensive geotechnical (3D seismic and well log evaluations) and engineering analysis has been completed on five exploration prospects in the Morichito Block. Based on the earlier independent third party review by Petrotech Engineering Limited in their NI 51-101 Report dated, March 31, 2008, the Morichito Block is estimated to contain Proven and Probable reserves of 141,350 BL plus contingent resources of 3.47 MMBL for a total of 3.6 MMBL with an estimated net present value of over C$120MM before taxes using a discount rate of 10%.
The Company plans to do a completion of the Morichito M2 discovery in November 2008. The Morichito #1N prospect exploration well is being planned for Q1 2009. The Company has already initiated building access roads obtaining permits, and reviewed several options for drilling rigs and services. As part of its overall cash management plan and cost reduction strategy, in these difficult markets, the Company has recently obtained approval from the ANH (Colombia Hydrocarbon Agency) on an extension to the contract for the drilling of its exploration wells for another 12 months.
Petropuli drilled the Morichito #2 well in late 2006, recovered oil, but was unable to complete the well at the time due to extenuating circumstances. Well logs from this well were analyzed both internally and by third-party petrophysical experts and showed five potential high-quality reservoir sands found in field analog wells in the area producing, for instance, 1,350 bopd of 37 degree API oil (independent source: La Punta Well, Mirador Formation, Llanos Basin - Baraka Petroleum Limited, ASX Quarterly Report January 30, 2008) and the Carbonera C-7 sands with an initial production rate at the Guarimena - 1 well drilled in 1988 by Ecopetrol which produced 1,693 bopd of 32.6 degree API oil (independent source: ANH databank).
Pursuant to a Termination and Release Agreement dated October 10, 2008, Petro Vista's Colombian subsidiary, Petropuli Ltda., immediately acquired a 47.8% Working Interest in the Morichito Block in consideration of the following payments:
Read B. Taylor, President and CEO of Petro Vista, commented, "The acquisition of the remaining interest in this block at a low upfront cost consolidates our interest in one of our highest potential assets. This block is located in a highly competitive hydrocarbon-rich trend with several recent significant discoveries. We believe this block has a highly prospective portfolio of five exploration prospects with net potential production of 2,100 bopd. The cash flow from this completion and the existing Tartaruga Block production in Brazil will allow us to progress our high quality, opportunity rich development and exploration drilling portfolios."
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