PetroLatina provided the following update on its Zoe-1 exploration well.
As previously announced on February 8, 2010, the Zoe-1 exploration well was drilled on the Midas Block to a depth of 10,924 feet. Wireline logging indicated two potentially oil bearing sections in the Umir formation and the Lisama formation. Initial testing of both formations has now been completed.
The Umir section was found to be over pressured and a stable flow of approximately 42 barrels per day of 23 degree API oil was recorded. The well currently continues on test and the water cut has reduced to approximately 5 per cent. and is declining further. Based on the test results and using petrophysical parameters derived from the well, seismic data and mapping of the subthrust structure, an oil bearing zone is present with, in the most likely case, original oil in place ("OOIP") of approximately 1.3 MMBO.
Testing of the Lisama zone was initiated on March 14, 2010 and while this was found to be pressured at more normal levels, it flowed approximately 15 barrels of very heavy oil (tar) and water. A second test flowed water only.
As a result, the Lisama section will be abandoned and the Zoe-1 well will only be used for production from the Umir sand. This sand continues to produce at approximately 42 bopd. Post-drilling remapping of the Zoe-1 structure and log analysis indicates that production from Zoe-1 remains economically viable, allowing PetroLatina to retain this block as a production area for the economic life of the field.
Zoe-1 was not included in the Company's recently updated reserves assessment, completed and announced by the Ryder Scott Company.
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.
Juan Carlos Rodriguez, Chief Executive Officer of PetroLatina, commented, "The Midas prospect was always recognized as being a higher risk stratigraphic exploration play but still attractive for drilling for its high potential reward. Although these test results were not as encouraging as we hoped, we will focus on moving the OOIP in the Umir section into Proved Reserves and produce from this formation. We now look forward to the remaining exploration and development wells to be drilled in 2010."
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