PetroLatina announced an operational update in respect of the testing of the Santa Lucia-4 development well which was recently drilled on the Tisquirama A Block in Colombia. PetroLatina is the operator of, and holds a 20% interest in the block.
The Santa Lucia-4 well, a commitment well, was drilled to a total measured depth of 8,700ft and encountered the target La Paz sand at a measured depth of 8,295ft. The indicated net pay was 27ft, as expected. The well has now been on test for approximately 20 days and is expected to produce at a gross rate of approximately 240 barrels of oil per day when it is placed on commercial production within the next two weeks. The well appears to have essentially no water production.
The Santa Lucia-4 well is producing crude oil of 24 degrees API which is considerably lighter than the 19 degrees API oil produced by other wells in this field. At this time, the reason for this is not fully understood, it may relate to a stratigraphic trapping mechanism, and the Company may drill additional wells in the future to better understand the situation which could eventually lead to an increase in the field's recoverable reserves.
Existing wells in the Santa Lucia field have individually produced up to 1.4 million barrels of oil and continue to produce at substantial rates with modest water cut. It is believed that this high recovery results from an active water drive in this field. These factors combine to create significant value to PetroLatina despite the Company's relatively low retained interest in the block.
Juan Carlos Rodriguez, Chief Executive Officer of PetroLatina, commented, "The Santa Lucia-4 well will increase the Company's production in the short term while adding the potential for considerable recoverable oil over the longer term. This well is the sixth of the eight commitment wells agreed in late 2007 as part of the negotiations to extend our license for the economic life of the field. The Company bears a disproportionate share of the cost of these commitment wells relative to its retained interest, but once the eighth commitment well has been completed in due course it will thereafter receive a considerably higher return per dollar invested in this field."
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