PetroLatina has announced a new exploration discovery. The Zoe-1 exploration well has now been completed and testing is underway. The Zoe-1 well is the ninth successive successful well drilled by PetroLatina in its current drilling campaign.
The Zoe-1 exploration well was drilled on the Midas Block at a location approximately 12km to the east of the PetroLatina operated Santa Lucia field. The Zoe-1 well location was based on the interpretation of the Midas Sur 3D seismic programme acquired by PetroLatina in 2008. It was located updip and on the same structure as the San Alberto well drilled in 1985 by Texaco. PetroLatina believes, on the basis of petrophysical studies, that the San Alberto well contained producible but untested hydrocarbons in the Paleocene Lisama formation. The Lisama formation produces oil at the Company's Los Angeles field located 30km to the north of the Zoe prospect. In addition to the primary Lisama formation target, the Zoe-1 well targeted a shallower secondary reservoir known as the La Paz formation which currently produces oil at the Company operated Santa Lucia field. A third reservoir target, the Umir formation, which produces oil at PetroLatina's 2009 Colon discovery, was also mapped at the Zoe-1 location.
The Zoe-1 well was spudded on 2 December 2009 and reached total depth of 10,924ft on 28 December 2009. The well was then logged and the correlations between the Zoe-1 well logs and those of the earlier 1985 San Alberto log confirmed that, at the primary target, the Lisama formation level, the well was about 60ft (true vertical depth subsea) structurally higher. This result confirms the Company's geological interpretation. Log analysis run by PetroLatina indicates that the Lisama section from 8,632ft to 8,701ft (69ft gross) is oil bearing with approximately 47ft of net oil pay. The section from 8,701ft to 8,730ft also contains reservoir quality rock and had good oil shows; however, based on the logs it is not yet clear whether this zone is oil bearing. In addition to the log indicated oil pay in the Lisama section, the Zoe-1 well also appeared to contain producible oil in the third target Upper Cretaceous Umir section where two thin sands were encountered. Those Umir sands were found to have very good petrophysical properties with porosities up to 27 per cent. and permeability of approximately 100 millidarcies.
Testing of the Zoe-1 well was initiated on 15 January 2010 in the Umir section. The Umir section was found to be somewhat over pressured and a stable flow of approximately 42 barrels of 23 degree API oil was recorded. The flowing Tubing Head pressure was approximately 1,500 pounds per square inch and the flow was recorded on an 8/64th inch choke. The well currently continues on test and the water cut is down to approximately 5 per cent. and still declining. Testing of the Umir formation is expected to continue until around the end of February when a service rig will then be mobilised to the well to undertake the testing of the primary target Lisama formation and, if successful, the tying in of this production to the Company's infrastructure in the area.
The Company notes that the above Zoe-1 results to date are not included in the recent updated reserves assessment completed by Ryder Scott Company L.P. ("Ryder Scott") as detailed in a separate announcement issued today.
The Latco-1 rig, which drilled the Zoe-1 well, has now been mobilized to the Santa Lucia field where it is currently drilling the Santa Lucia-4 development well. This development well is located between two existing wells which are producing 19 degree API oil from the Eocene La Paz formation. Based on the production in the first three Santa Lucia wells, the La Paz formation has good reservoir characteristics and as a result individual wells such as Santa Lucia-2, which offsets the well currently being drilled, has produced, in aggregate, approximately 1.4 million barrels of oil since 1989 when it was first put on production. The Santa Lucia field has several undrilled development locations as well as potential extension drilling locations and a nearby undrilled prospect. Accordingly, the Company plans to drill at least one development well and one exploration well on this block during the current drilling campaign.
PetroLatina is the operator of the Santa Lucia field and holds a 20 percent interest in the field alongside Petrosantander Inc. (20 percent) and Ecopetrol S.A. (60 percent). As a result of the 2007 licence extension agreement, the Company's Santa Lucia block was extended from 2013 to the economic life of the field, PetroLatina and Petrosantander Inc. assumed the obligation of bearing the cost of the first three development wells to be drilled. Once that obligation has been satisfied, the parties, including Ecopetrol S.A., if it chooses to participate, will share the cost of any future drilling on the basis of their participating interests.
Juan Carlos Rodriguez, Chief Executive Officer of PetroLatina, said, "The Zoe 1 well is the ninth successive successful well drilled by PetroLatina in the current drilling campaign and we look forward to updating the market fully once the testing has been completed. In the meantime, the drilling program continues apace as we seek to convert our Probable and Possible Reserves into Proved Reserves and exploit the potential of our exploration assets."
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