Taghmen Energy Has Been Awarded License 7-2005 in Guatemala

Taghmen Energy has been notified by the Guatemala Government that it has been awarded License 7-2005 (Tortugas/Atzam) in the recent licensing round. The Company now has 30 days to negotiate and settle the terms of the license and its formal work program.

License A7-2005 (Tortugas/Atzam)

License A7-2005 (Tortugas/Atzam) is a 25 year contract consisting of a 6 year exploration license convertible to an exploitation license at Taghmen's option, with an aerial extent of approximately 77,718 acres, located in the north-western corner of Guatemala in the department of Alta Vera Paz. The area is approximately 20 kilometers west of the Rubelsanto field discovered by Hispanoil in the early 1970's, in which in excess of 30 million barrels have been recovered. Tortugas is accessible by road and is 375 kilometers from Guatemala City. By air, the closest serviceable airstrip is at Rubelsanto. The company is evaluating the possibility of re-opening an abandoned 3,000 foot airstrip at the base of the Tortugas dome.

The license has two areas of interest. The first is around the Tortugas salt dome and the second is an area to the south of the license, known as Atzam. The original exploration of the region was for sulphur, specifically in the Tortugas area. However, every well drilled on the flanks of the salt dome contained live oil shows. Three of the wells drilled on the north flank of the salt dome flowed 28-32 ° oil from the top of the Coban C 17 from depths of 1300 feet to 1800 feet.

Once oil was discovered, 13 wells were drilled on the area now covered by the license. Eight of these were on the Tortugas structure, one on the Atzam structure and four elsewhere on the license. The Tortugas and Atzam wells encountered hydrocarbons, and initial indications are that this has an API of 35 o .

Based on the review of available data the Company estimates that the possible reserves on the license to be in the region of 5 to 16 million barrels of oil.

Planned work Program

With regard to License A7-2005, we plan to

  • Complete the required environmental study over the next three months
  • Complete the necessary infrastructure to allow ready access to the areas of interest
  • Work over wells Atzam 2, Tortugas 4 and 5 from late in the fourth quarter of 2005 and the first half of 2006
  • Shoot 150 km 2 of 3D seismic and 50 km of 2D seismic over the license, and
  • Commence a four well drilling program over Tortugas/Atzam from early 2006.
  • The proposed work program is expected to cost approximately $10 to $15 million in the first three years.

    Nicholas Gay, President and CEO of Taghmen Energy Plc:
    "We are delighted to announce this new license award of Tortugas. It has been an area which we targeted for sometime and believe it will add further value to the Company's assets in Guatemala,"