Amerisur provided the following update on operations in Colombia and Paraguay.
Commercial production from the Platanillo-2 and Alea-1 wells has benefited from the Company's production enhancement program and is currently at approximately 550 BOPD. As a result, the Company is generating positive operating monthly cashflow. Maximum recorded daily production during the recent period was over 600 BOPD.
The Company is encouraged by the results of this work and will continue to apply these techniques to further enhance production. The wells are clearly achieving the targets set out in the AGM presentation, despite some disruption to export capacity within the Putumayo area as a whole in recent weeks.
The Company also announces an expansion of the production facilities at Platanillo. The current processing and storage system will be expanded by the addition of a further 3,000 bbl of storage capacity complete with treatment and transfer equipment. It is expected that the new facilities will be commissioned within the next 2 months without impact on existing production.
The Company also reported that the contract for the acquisition and field processing of 125km2 3 Component / 3 Dimensional seismic data over the Platanillo field has been awarded to Compañía Geofísica Latinoamericana S.A. (CGL), an established contractor which has considerable experience within Colombia and particularly in the Putumayo basin.
The survey design has been optimized to ensure that all zones of interest within the Platanillo field are illuminated with precision and high resolution. These zones range from the basal sands of the Caballos formation at approximately 8,500ft below ground level to the N sands approximately 1,000ft shallower. The survey will use advanced technology to capture three orthogonal wave components instead of the usual single vertical wave component. These components will be used during processing to further understand physical attributes of the reservoirs and to help ascertain pore fluid characteristics. The survey preparation work will begin over the next few days, with completion planned within 16 weeks, depending on operating conditions. Initial results will be available in 2011.
Following the extension of the exploitation area to the south, the Company now holds rights from the national border on the River Putumayo and so the survey will begin from that limit and move northwards to cover the entire commercial area. Once data has been recorded to just beyond the location of the Platanillo-1 well, that portion of the data will be processed independently with the aid of the existing 2D seismic model and well data already held in house. This processing will allow the early definition of the first new well locations for the 2011 program.
It is expected that the first new well of the planned six well 2011 drilling program will be spudded early in the New Year. Planning and procurement work for those drilling operations is well advanced.
In the Fenix block we have performed a number of chemical treatments on the reservoir intervals under test in Iguasa-1. Those treatments indicated a reduction in formation damage and an improvement in near-wellbore permeability. Subsequently the Company performed a sustained drawdown test with a Hydraulic Pumping system. The Company is now analyzing the results of that test.
On the recommendation of the specialist contractor, Isabel-1 was recompleted with a smaller, mechanical reciprocating pumping system following the mechanical failure previously reported. That pump has continued to test the zones encountered in the well, producing at rates of 35 to 70 BOPD at 1.5 strokes per minute. The test program envisages approximately three months' inflow testing of this well, with regular measurements of fluid level and adjustment of parameters, with the objective of establishing the commerciality of the accumulation.
The well has produced approximately 2,300 BO to date, which is sold, together with Iguasa production, to Ecopetrol.
In the San Pedro block, the Company has made significant progress with new mapping and the design of the proposed 2D acquisition program has been completed. The complete program envisages up to 280km of new data acquisition. This may be expanded or reduced in accordance with conditions on the ground. It should be noted that the actual length of survey does not strongly affect the overall cost of the work, given relatively high fixed cost levels. The Company has now begun work to establish rights of access on the land where the lines will be acquired, and will shortly begin the bidding process for the acquisition. Given success in those processes, it is expected to begin the acquisition program during mid 2011.
John Wardle, CEO, said, "In Platanillo we are on time and on track to deliver important results over the next months. It is important to underline that the 3C/3D survey will provide us with much enhanced detail regarding our field structure and will guide us towards delivery of important, high value well locations. Our understanding and experience of the Fenix area continue to improve and we look forward to unlocking considerable value in these discoveries. Paraguay is potentially a transformational exploration play and we feel that the program as designed will highlight this further. This is a time of great change for the company and I am very pleased with our progress."
Giles Clarke, Chairman, said, "Sound operational progress has continued with production, and therefore cashflow levels increasing steadily. Preparations are on track for our six well 2011 drilling program. I look forward to updating shareholders on the results of our work in both Colombia and Paraguay over the coming months."
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