Emerald Energy Acquires Stake in El Algarrobo

Emerald Energy has entered into an agreement with Rancho Hermoso SA to farm-in to the El Algarrobo Association Contract.

Subject to the approval of the Colombian state oil company, Ecopetrol, Emerald will participate in the drilling of the El Algarrobo #1 exploration well and will earn a 50% interest in the El Algarrobo Association Contract. It is expected that the well will be drilled in the first quarter of 2005 at a cost of approximately $3 million. from Ecopetrol The El Algarrobo prospect lies approximately 35 km NW of Emerald's Campo Rico oilfield in the Llanos Basin of Colombia and about 5 km NW of the Rancho Hermoso oilfield, which produces light oil of 37 degrees API at individual well rates of up to 2,500 barrels per day. from Ecopetrol Alastair Beardsall, Emerald's Chairman, said: 'The El Algarrobo farm-in emphasises Emerald's long term commitment to Colombia. It adds another well to our accelerated drilling program that started two weeks ago. Being so close to established oil production, we are very hopeful of a positive result from the El Algarrobo exploration well.' from Ecopetrol Emerald currently produces in excess of 1800 barrels of oil per day from its two producing wells: the Campo Rico #1 well and the Gigante #1 well, located in the Llanos and the Upper Magdalena basins of Colombia, respectively. The Campo Rico #2 development well is currently drilling below 9000 ft.