GeoPark has announced the successful discovery of gas in a new reservoir (of Tertiary age) in its newly drilled Monte Aymond 34 well on the Fell Block in Chile. GeoPark operates and has a 100% working interest in the Fell Block.
GeoPark drilled and completed the Monte Aymond well to a total depth of 2,367 meters targeted for the Springhill formation, which was encountered at approximately 2,254 meters and which registered positive indications of hydrocarbons during drilling and from logs.
At a shallower depth of approximately 716 meters, another attractive sandstone reservoir was encountered with hydrocarbon shows in the El Salto formation of the Tertiary section. A production test was carried out in the Tertiary reservoir, in a 12.5 metre perforated interval, and which flowed at a rate of approximately 6.1 million cubic feet per day of gas (mmcfpd), (or approximately 173,000 cubic meters per day (m3/d) of gas), through a choke of 16 millimeters (mm) and with a flowing well head pressure of 782 pounds per square inch (psi). These are preliminary results and further production history will be required to determine stabilized flow rates from this well and the extent of the reservoir.
The Springhill formation is expected to be tested and produced following further evaluation of the Tertiary discovery.
This new productive well represents the eighth successful well drilled by GeoPark in 2009, out of eight wells drilled. It also represents the second discovery of a new productive reservoir on the Fell Block by GeoPark in 2009. In October 2009, GeoPark discovered oil in the Tobifera formation in the Yagan Norte 1 well; which is currently producing oil at a rate of approximately 350 barrels per day.
GeoPark's independently appraised proved and probable reserves of 42 million barrels oil equivalent have only been calculated from oil and gas in the Springhill formation. No estimates have yet been provided for these recent finds in the Tobifera or Tertiary reservoirs or for potential future discoveries in these new horizons.
Recent drilling successes in the Upper Tertiary by ENAP (Chile's State Oil Company) in a neighboring block in Chile and by other operators in Argentina in the same geological basin to the north, confirm that the Tertiary reservoir is a viable hydrocarbon target. Its shallower depth also make it economically attractive.
A flow-line and necessary production facilities are currently being installed to connect the Monte Aymond well to GeoPark's gas pipeline infrastructure with a targeted hook-up scheduled within 10-14 days. Gas sales will be delivered to the large methanol facility located adjacent to the Fell Block.
During 2009, GeoPark is carrying out a ten well drilling program on the Fell Block with drilling soon to commence on the Dicky 16 well and with testing operations soon to begin on the Alakaluf 5 well.
For 2010, GeoPark is planning a balanced work and investment program totaling approximately US $50 million and consisting of a 14-16 well drilling program, 2D and 3D seismic surveys and an expansion of its production facility infrastructure. GeoPark, which is the first private oil and gas producer in Chile, owns and operates 6 blocks in Chile and Argentina with approximately 3.7 million gross acres. Its production is currently 6,500 barrels of oil per day equivalent (boepd).
Commenting, James F. Park, Chief Executive Officer of GeoPark, said, "The discovery of commercial hydrocarbons in the shallow Tertiary Salto formation on the Fell Block adds a new important growth dimension to our Fell Block project in Chile. Added to our recent discovery in the Tobifera formation and our record of drilling success in the Springhill formation, the discovery of a third productive formation on the Fell Block is significant. Firstly, it impacts our production, revenues and reserves. Secondly, it substantially expands our opportunity portfolio while reducing exploration risks. We salute our geoscience team which has been working for several years to develop these new plays while continuing to explore and consistently grow production from the traditional Springhill formation."
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