Americas Petrogas has reported that as part of its ongoing objective to add value to its natural resource assets, it has initiated steps towards the commencement of first oil production from its Medanito Sur property, completed a 3D seismic acquisition program on several of its other Argentinean properties and has commenced assembly of a team of experts to continue preliminary evaluation work on its potash concession located in Bayovar, Peru (the "Bayovar Concession"). The Company also is pleased to provide a summary of its 3rd quarter financial results.
Oil and Gas
The Company announces that construction of a temporary production system and tie-in of wells at Medanito Sur for long-term production testing, scheduled to commence in 2009, are being completed. The low-cost, temporary production system will allow the Company to initiate production and generate cash flow in the near term and to gather information necessary for the design of permanent production facilities. During the long-term production testing phase and until commercial production begins, oil produced from Medanito Sur will be trucked to an operator adjacent to the Company's block for treatment for commercial sale. Work is also in progress for an oil sales contract and to obtain requisite permits from various government authorities.
Concurrent with the establishment of the temporary production system, the results of the first three wells drilled on Medanito Sur are being integrated into the Company's existing 3D seismic database. Further processing techniques have been applied to the seismic data collected, Americas Petrogas Inc. including the Coherency Cube approach, to facilitate this integration and to provide additional exploration and appraisal well locations on this block.
The Company has also completed its program of 3D seismic acquisition on the Los Toldos II block. An aggregate of 175 square kilometers (68 square miles or 43,500 acres equivalent to 1.9 townships) has been collected. The raw data collected during the seismic program is currently being processed and is scheduled to be in the interpretation phase by January 2009.
API has also completed its program of 3D seismic acquisition on part of the large Totoral and Yerba Buena blocks located in the southern portion of the Neuquen Basin. An aggregate of 122 square kilometers (47 square kilometers or 30,000 acres equivalent of 1.3 townships) has been collected. The raw data is currently being processed and is also scheduled to be in the interpretation phase by January 2009.
Elsewhere, the Company is also continuing its geological analysis and review of well data on other API blocks.
Finally, API has recently added two new professionals, a senior geologist and a financial officer, to complement the Company's proven exploration, production and operations team in Argentina, led by Mr. Guimar Vaca Coca, former director of Pioneer and Chauvco in Argentina.
Commenting on operations to date, Mr. Barclay Hambrook, President and CEO stated: "The $15 million private placement completed at $1.15 per unit with large financial institutions prior to API's listing as a Tier I oil and gas issuer on the TSX Venture Exchange, has left API on a solid financial footing. The ongoing construction of a temporary production system is expected to allow for production from Medanito Sur in the early part of 2009, which will result in additional revenues flowing to API.
"The recent completion of the two large 3D seismic programs in Argentina generates optimism for further success in finding many drillable locations and for new successes in finding additional oil and or gas reservoirs. All of API's operations conducted to date are intended to continue the process of adding value to API's significant portfolio of resource properties. We are looking forward to commencing oil production in Argentina."
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