Alange announced the spudding of the Topoyaco-1 exploration well, located in Topoyaco block of the Putumayo basin. Covering an area of over 60,000 acres, the block constitutes the largest unexplored portion of that zone in the foothills of the Andean mountain chain, which is part of a trend that has historically been highly prolific in many fields, including Costayaco, Mary, Linda, Toroyaco, Juamambu, and Azar. Alange Energy has a 50% working interest in Topoyaco, with Pacific Rubiales Energy holding the other 50%. Alange Energy is operator of this field.
The spudding of the well follows extensive, new 2D seismic carried out in the southwest portion of the block.
Luis E. Giusti, the Company's Chief Executive Officer, commented, "As a result of the additional seismic studies we undertook, we now have significantly more detailed information and a better understanding of the geology of the block. With the spudding of Topoyaco-1 and committed funds for two more exploration wells, we anticipate promising development prospects in the near term."
The structural model of Topoyaco consists of thrust faults with repeated sections. The final location of the well follows the extensive, new 2D seismic carried out during the past 8 months, as a necessary complement to previously run 3D and 2D seismic. The structural complexity of the area required a thorough analysis, which has depicted and pinpointed three large attractive prospects (B, C and D). The first two prospects are in the overthrust blocks and the last one is in the subthrust block, the latter being the largest prospect. The first well, Topoyaco-1, is targeting the prospect B, and it will be followed with additional spudding in early August of the Topoyaco-2 well, targeting the prospect C. Topoyaco-1 will be drilled to an estimated depth of 6,365 ft MD, while Topoyaco-2 will go to an estimated depth of 8,510 ft MD. The target formations of both these prospects are Villeta and Caballos, which produce oil in the same region. The Company will continue to update the market on the progress of the Topoyaco block.
Topoyaco's current exploration plan is supported by two rigs that have been contracted for the upcoming several months (750 HP and 1200 HP, respectively). Drilling time for the first well is anticipated at 40 days. These rigs have been secured for the duration of the Company's drill program to ensure no delays to the exploration campaign in Topoyaco. A total of $17 million of capital has been budgeted for this block in 2010.
Calculations of gross risked resources for Alange Energy's Topoyaco block are certified by Petrotech Engineering Ltd. in its March 2009 report and are 6.5 MMbbl, 8.2 MMbbl, and 31 MMbbl for prospects B, C and D, respectively (best estimate).
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