PetroLatina has announced successful results for both the Chuira-1 and Colon-2 wells together with an operational update.
- Two more wells; Chuira-1 and Colon-2 have proven to be successful making a total of six successful wells drilled in the program to date. These wells are Colon-1 and 2, Chuira-1 and Los Angeles-11, 12 and 14.
- The Chuira-1 exploration well on the Midas block encountered, logged and tested two oil pay zones in the La Luna formation.
- The Colon-2 appraisal well was drilled through the Umir sand oil pay which tested up to 1,200 barrels of oil per day ("bopd") in the Colon-1 discovery. Log analysis of Colon-2 indicates that it contains the same pay zone as Colon-1 and has additional oil bearing sands beyond those tested in the Colon-1 discovery.
- The Los Angeles-12 well, a previously reported oil discovery in the Umir sand formation which lies below the producing Lower Lisama sands, has now been successfully fractured to increase the production rate. It is expected that this well will be put on production this week at a rate of approximately 300 bopd with API crude of 26 degrees.
- A new workover rig, recently purchased by our key local drilling contractor, Latco, is now in service and has completed its first successful field operation in the Los Angeles-12 well.
- A cost optimisation review has been completed to take advantage of recently reduced equipment and drilling services costs in Colombia. Cost reductions of up to approximately 15% are anticipated on the average total costs per typical well experienced by the Company to date. For example, the average cost of approximately US $1.83 million per completed well at the Los Angeles field is expected to be reduced to approximately US $1.60 million on future wells once the identified cost reductions have been fully implemented.
- An updated independent reserves report is being commissioned which will integrate the results of the six wells drilled in 2009 to date, with the report expected to be available towards the end of this year. Given the success of all six wells, a significant uplift in the Company's proven and probable reserves is anticipated.
- The Company ultimately elected not to participate in 20% of the Atzam-3 well recently drilled in Guatemala by Quetzel Energy Limited, to whom PetroLatina sold its Guatemalan interests in July 2007, and the Company instead continues to focus its resources on the development of its Colombian assets.
Juan Carlos Rodriguez, Chief Executive of PetroLatina, commented, "PetroLatina is targeting the drilling of at least a further two wells across its three Colombian license areas during the remainder of 2009 to supplement the six successful wells already drilled to date. The first six wells in the ongoing drill programme have each proven successful and we remain on course to meet our key objectives of delivering considerably increased production, cash flow and independently audited reserves in 2009."