Quetzal Discovers Oil in Canaguaro Block

Brownstone Ventures announced an oil discovery in the Lower Mirador Formation at the well Canaguay - 1 on the Canaguaro Block in Colombia. Brownstone has a 25% working interest in the Canaguaro Block. Partners in the project are Quetzal (25% working interest and operator) and Condor (50% working interest).

Canaguay - 1 is the first well to be drilled on the Canaguaro exploration drilling program. The well began drilling on June 3, 2010, and finished drilling at a final total depth ("TD") of 15,850 feet on August 4, 2010.

Quetzal began completion and testing operations on September 9, 2010. To date, the Une/Lower Sandstone, Gacheta, Barco and Lower Mirador intervals have been perforated and tested. The Upper Mirador - which had the majority of the indicated oil pay on the well logs - is expected to be perforated and tested in the next several weeks.

Canaguay-1: Cased hole Drill Stem Test Summary

The Operator has provided Brownstone with the following test summary:

  • DST #1, Une/Lower Sandstone, perforated 15,484 - 15,469 ft, 15 ft: Gas was observed at surface at a rate that was too small to measure and the pressure data indicated relatively poor permeability. 50 barrels of 37 degree API oil was recovered during the reverse circulation after the test.
  • DST #2, Une/Gacheta, perforated 15,359 - 15,353 ft, 6 ft: Pressure data indicated poor permeability in the interval. A small sample of 27.4 degree API oil was recovered during the reverse circulation of the after the test. Hydrocarbon volumes were too small to measure.
  • DST #3, Gacheta, perforated 15,248 - 15,231 ft, 17 ft: Pressure data indicated very poor permeability in the interval. No hydrocarbons were recovered during the test.
  • DST #4, Barco, perforated 14,736 - 14,724 ft, 12 ft: Pressure data and production volumes indicate fair zonal permeability however no hydrocarbons were produced from this interval.
  • DST #5, Lower Mirador, perforated 14,297 - 14,292 ft, 5 ft: Coiled tubing was run to 6,000 ft and 500 standard cubic feet per minute of Nitrogen was pumped to remove the fluid cushion, and achieved a drawdown of approximately 17%. Fluid production rates averaged 2,225 bbls/day of 20.7 degree API oil with a trace of water during the test.
  • DST #6, Upper Mirador, perforation interval to be determined based on further study of Lower Mirador results: Open hole well logs indicate that this reservoir is the most prospective in the well, which will be confirmed by completion and testing over the next several weeks.

Brownstone is earning into its 25% working interest in the Canaguaro Block.