Alange announced its share of gross production (before deduction of royalties) has now stabilized above the level of 3,000 barrels oil equivalent per day ("boe/d"). The Company recently reported that it exited the first quarter of 2010 at a production rate of 2,280 boe/d. The growth in production achieved in the last two months is primarily attributable to contributions from the continuing appraisal and optimization work being conducted in the Cubiro Block and the recent commencement of production from the La Punta-3 well.
Luis E. Giusti, the Company's Chief executive Officer, stated, "We are well on our way to surpassing the 3,500 boe/d level by the end of the second quarter as recently announced. We are encouraged by the continuing success in our appraisal and development campaign at Cubiro and to begin to see a positive contribution to our growth strategy from our interest in the La Punta Block".
Cubiro Block Update
The Company announced that the Careto-5 appraisal well, located in Polygon A of the Cubiro Block, drilled with the objective of production from the Carbonera C-7 formation, found 20 feet of net oil sand. The Careto-5 well has now been stabilized at 670 barrels per day (Company share 405 boe/d) of 31 degrees API oil with 13% BS&W and was completed with an electric submersible pump at 30 Hertz frequency. This well had been drilled directionally with an angle of 35 degrees inclination to a final depth of 8,450 feet, finding the top of the Carbonera C-7 sandstones at a depth of 6,202 feet TVDSS (7,144 feet MD) and the oil-water contact at 6,229 feet TVDSS (7,174 feet MD). This well discovered oil in the Gacheta formation, the top of which was found at a depth of 6,945 feet true vertical depth sub-sea (TVDSS) (7,954 feet measured depth (MD)), and was producing from this horizon for an evaluation period, previous to its recent recompletion. The total vertical oil column in the three horizons (Carbonera C-7, Guadalupe and Gacheta) is 35 feet. Petrophysical evaluation of the well data indicated porosities of 28.8%, reservoir pressure of 2,534 Psia and a Productivity Index of 1.2 Bls/Psia in the Carbonera C7 formation. The recompletion of Careto-5St, previously producing from Gacheta, to the Carbonera C7 formation, has increased the Company's share of daily production by approximately 285 boe/d since the end of the first quarter.
The Company also provided an update on the optimization work that was conducted on the Barranquero-1 well, a discovery in early 2010 that had been drilled to explore the prospectivity of the Carbonera C-7 formation in Polygon B of the Cubiro Block and found 15 feet of net oil sand. The Barranquero-1 well exited the first quarter of 2010 at a production rate of approximately 460 boe/d on natural flow. After the proper evaluation of the well in natural flow was performed, the Company recently completed this well in the C-7 formation using an electro-submersible pump, increasing the daily production rate to 800 boe/d and the Company's share of gross daily production by approximately 238 boe/d compared with the end of the first quarter.
The Cubiro Block is located in the Llanos Basin of Colombia. Cubiro is an asset in which the Company holds a 60.5% working interest in Polygon A, a 70% working interest in Polygon B, and a 25% working interest in Polygon C.
La Punta Update
The Company also announced that the La Punta-3 appraisal well, drilled to explore the prospectivity of the Mirador formation of the La Punta Block, recently found 28 feet of net oil sand. Well tests performed had shown an initial production rate of 2,771 boe/d of 35.2 degrees API oil with 0.1% BS&W, on natural flow, with a choke of 34/64 inch. The La Punta-3 well is currently producing 3,377 boe/d (Company share 203 boe/d).
La Punta-3 is an appraisal well drilled directionally to a total of 8,101 feet true vertical depth sub-sea ("TVDSS") (8,675 feet MD) which reached the top of the reservoir, the Mirador formation at 8,267 feet MD. The petrophysical analysis shows 28 feet of net pay with an average porosity of 24%. In agreement with the Block's operator, the Company decided to complete this well in the Mirador formation by using an electro-submersible pump, with the simulation projecting 6,000 barrels per day of production at 30 Hertz of frequency.
The La Punta Block is located in the Llanos Basin of Colombia. The Company has a 3.6% working interest in the La Punta-2 well and a 6% working interest in the La Punta-3 well.
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