Petrolifera was successful in expanding corporate liquidity, while also making a significant natural gas discovery at Brillante on its 100 percent-owned Sierra Nevada License in the Lower Magdalena Basin onshore Colombia, during the first quarter of 2010. Additionally, the company's five well infill program, conducted in late 2009 at the Puesto Morales Norte ("PMN") in Argentina, contributed to improved production stability during the reporting period. An additional four infill wells are planned for 2010 to reinforce the positive impact of the 2009 program and the first quarter 2010 expansion of water treatment and handling facilities at PMN.
Petrolifera continued its program of financial consolidation during the first quarter of 2010 ("Q1 2010"). Production remained relatively stable compared to Q3 2009 and Q4 2009 although it was down from the prior year. This stabilization reflects the impact of the first new drilling for some time in Argentina; this occurred during Q4 2009, which favorably impacted on Q1 2010 results by overcoming normal declines. As a consequence, we had a respectable level of sales and cash flow from operations. A modest loss was recorded.
Most of our activity during the quarter focused on Colombian drilling, financial matters and capital raising activity. With the decline in our reserves in 2009, we continued our dialogue with our reserve-backed lenders and we believe we are nearing completion of a revised facility, which we anticipate on renewal and with final documentation will be characterized by an extended overall term in addition to some regular debt reduction payments. This renewal will enhance working capital, which for the moment has all of our reserve backed debt as a current liability. Further liquidity enhancements occurred subsequent to the end of the reporting period with the closing of the successful bought deal equity financing we initiated in March 2010 and completed in early April 2010.
As the quarter progressed, we recognized the likelihood of having to dedicate a portion of our anticipated cash flow to debt retirement. Also, having been unable to consummate a significant farmout of either our Colombian or Peruvian acreage in as timely a manner as envisaged in our internal planning process, we determined we needed additional funds to pursue and complete certain exploration spending in Colombia, including at Brillante. Simultaneously, we were continuing our dialogue with industry partners about possible joint ventures to recover some of our sunken capital, in one form or another and to receive a carry through certain higher cost drilling.
We were fortunate to secure a bought deal proposal from a strong syndicate of Canadian investment banks and raised over $20 million of new equity (before expenses of the issue). This included proceeds from the exercise of the over-allotment option granted to the dealers who marketed the issue of common shares. This extra capital provided Petrolifera with more flexibility and is anticipated to place us in a stronger bargaining position with prospective farminees, especially as we dialogue about joint ventures on our high potential acreage.
During the quarter, we successfully remediated the La Pinta 1X well through the use of a snubbing unit, which we had secured and transported to Colombia as part of our program to attempt to retest the CDO Formation. Readers will recall this Formation had yielded light crude oil with an instantaneous flow rate exceeding 700 bbl/d, before sand plugged the tubing in the well and the flow stopped. Instantaneous flow rates are not stabilized flow rates and may not be indicative of the ability of the well to produce light gravity crude oil at these or comparable rates.
Unfortunately, while the remediation was successful, the tubing again plugged and we have decided to abandon this zone and move uphole to test the Porquero Formation, which encountered crude oil shows while drilling, and based on log analysis, appears to be crude oil bearing and a potentially good reservoir. This can only be confirmed by testing, which should be underway shortly. The outcome of the test will determine a future course of action on this crude oil play and the La Pinta 1X well. We have initiated a 3D seismic program over the La Pinta structure, which is also prospective at shallower depths for both crude oil and natural gas.
We spudded the Brillante SE-1X well on the Sierra Nevada License in mid-February, 2010. The well was drilled on time and under budget without encountering any undue drilling complications and tested significant volumes of natural gas with no water. A 212 foot gross pay interval (105.5 feet of net pay) was tested and yielded flowing natural gas at a rate of 8.4 mmcf per day, through a 48/64" choke, with a surface pressure of 579 psi from a depth of just below 3,000 feet. While not conclusive on a standalone basis, these rates and the shallow depths augur well for possible future commercial exploitation, although further testing and likely more drilling will be required before this can be confirmed. A final absolute open flow ("AOF") rate of 18 mmcf per day was calculated once bottom hole data could be recovered. The well had considerably more indicated pay thickness below the tested zone, which has been recognized by an independent consultant in a petrophysical evaluation, which could add to the reserve and resource backing for the play and the well. A long term production test will be conducted before any decisions on commerciality can be made.
We continue to anticipate farming out the cost of drilling and testing the San Angel well prior to year end on the Magdalena License, which is contiguous with the Sierra Nevada Block. Confirmation of the indicated significant Brillante discovery and possible success at San Angel would likely provide the potential for significant resource backing and infrastructure construction to get the natural gas to available markets, once necessary regulatory approvals are received. Market conditions seem to be developing on a favorable basis with growing demand, limited new finds and the prospect of attractive pricing for natural gas.
Our Turpial Block in the Middle Magdalena Basin of Colombia will be evaluated by an expanded 2D seismic program this year. Petrolifera will retain a 50 percent working interest in this Block, while continuing to hold a 100 percent interest in both the Magdalena and Sierra Nevada Licenses. Our large working interests provides considerable leverage to success through drilling for our shareholders, while also facilitating a basis to farmout a portion of this working interest for work, cash or other form of consideration on the lands. In this manner, Petrolifera gets carried through the expenditures and cash outlays during the high cost, higher risk phases of the evaluation of its acreage.
In Argentina, we have successfully farmed our remaining interest in the Vaca Mahuida Block and will retain operatorship, a 25 percent working interest and are carried for the cost of up to four exploratory wells on the License. Some early encouragement has occurred while drilling. Our Puesto Guevara Block was also farmed out for a carry through two wells while retaining a 44 percent working interest and operatorship.
We anticipate up to four additional infill development wells will be drilled within the Puesto Morales Norte Field during the balance of 2010 and Petrolifera anticipates we may be able to encourage the drilling of numerous farmout wells to evaluate other potential on the Block, including the evaluation of the Loma Montosa Formation, which is productive in the area.
We continue to be excited about our holdings in all of Argentina, Colombia and Peru. Our Peruvian blocks continue to be held in high regard by the industry and we envisage accelerated activity on them as the year progresses, once we secure our Environmental Impact Assessment approvals for drilling, especially on Block 107. Farmout discussions are continuing with new interest from third parties emerging as time passes.
Having secured new capital, increased financial flexibility and a strengthened balance sheet, Petrolifera can now move forward with confidence and the prospect of a much broader and more valuable reserve base, which will enable the company to focus on the future and prospective exploitation of this expanded asset base with attendant cash flow growth, once the overall scale of the opportunity and success is more thoroughly evaluated and converted to productive status.
In our opinion, our land base remains among the best in the industry among companies active in onshore South America at the present time. Our large working interests favor us for the impact of success on underlying valuations. The restoration of exploration success will restore confidence in the outlook for Petrolifera and continued drilling will lead to growth and added value.
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