La Cortez Bumps Production Rate at Maranta Block
La Cortez provided the following operational update regarding activities in the Maranta Block.
Maranta Block: Mirto Field - Mirto-2 N sand Production Test Results
As previously reported, after the workover conducted in the Mirto-2 well, and the production testing initiated on January 9th, 2011, La Cortez announced that the well has been on production since then with the following results:
Average oil production over the testing period has been 558 bopd Gross (112 bopd net to La Cortez before royalties) with an average Base Sediment and Water (BS&W) of 3.03% over the same period. Total fluids production averaged approximately 596 bopd. Over the last 10 days, production has been stable at some 544 bopd with almost no water production (see graph below).
Emerald, as operator of the Block, has received authorization from the Colombian Ministry of Mines to continue production from the well under a long term test. This period will be used to conduct well pressure testing and to gather other information use to define potential of this reservoir as well as to optimize production rates.
The Mirto-1 well continues to be shut in due to mechanical problems. A review of the conditions of this well is currently being performed in order to determine potential corrective actions regarding both the Villeta U and Villeta N sands production. These corrective actions will also depend on performance of the results on the Mirto-2 Villeta N sand long production test.
The Maranta block covers an area of 90,459 acres (36,608 hectares) in the foreland of the Putumayo Basin in southwest Colombia. Emerald signed its E&P contract with the Agencia Nacional de Hidrocarburos ("ANH"), Colombia's hydrocarbon regulatory agency. Emerald has filed a request with the ANH for the assignment of the 20% working interest in the Maranta block to La Cortez. The ANH granted La Cortez until April 15, 2011 to present the 2010 audited financial statements along with other financial information required.
As indicated before, both Emerald Energy PLC (operator of the block) and La Cortez have complied with the exploration obligations on this block as per the contract signed with the Agencia Nacional de Hidrocarburos (the "ANH"), Colombia's hydrocarbon regulatory agency. Under the contract terms and conditions and after completion of phase 3 exploration, with the drilling of Mirto-2 well last year, we and Emerald are required to relinquish 50% of the area of the block, as selected by us and Emerald, and we have the option to continue exploration activities in the remaining 50% of the area by committing to additional exploration activity with the ANH, such as new seismic acquisition or drilling a new exploration well. This is a normal procedure in contracts signed with the ANH. The area around the Mirto field will be retained to continue with the evaluation process. Emerald has presented to the ANH the area to be relinquished along with the work commitments to be conducted in the remaining area of the Block. The work commitment suggested is either new seismic acquisition (120 Km of 2d seismic) or the drilling of an exploration well. No final agreement has been reached yet with the ANH, but it is expected to be executed in the near future.
Andres Gutierrez, President and CEO of La Cortez, commented on the announcement, "We are very pleased with the production levels obtained from the Mirto-2 N sand during this initial period of testing. We are optimistic that this will continue during the extended test and that the data gathering will allow us to determine the potential of this reservoir. This initial production will generate cash flow to the company to cover some of the costs associated with our operations in the country. We continue aggressively to evaluate other opportunities in a variety of basins in Colombia."