Gold Oil Acquires Stake in Colombian Fields

Gold Oil has acquired a significant interest in the Nancy-Bourdine-Maxine (NBM) Oil Fields in southwest Colombia. The fields were discovered by Texaco and put on production at 1,400 bopd in 1975 to 1995 when they were abandoned for economic reasons. At the time of abandonment the Nancy 1 well was producing at 200 bopd with no water. The License is held by Union Temporal that is made up of a group of small sized local oil and service companies and individuals led by ex-oil personnel from companies such as BP, Oxy and Schlumberger, all of whom have extensive experience in Colombia and the NBM Oil Fields. The transaction, which is subject to the approval of Ecopetrol, will make Gold the largest partner with a 40% interest.

The current plan is to re-enter the Nancy 1 well and recommence production by use of a jet pump from the existing zones and also to perforate zones previously ignored. The workover rig is currently being contracted to commence operations in the next few months.

The consideration is $330,000 with an increased share of production for Gold until payback when a contribution to back costs is made. Gold has to pay its share of the re-entry costs estimated at $220,000.

Gary Moore, Managing Director of Gold, said "We have been looking at Colombia for some time and we like the many oil and gas opportunities there. We decided that NBM was an ideal low cost entry into a new country with an experienced and very low cost operator where we have every possibility for early cash flow and exploration upside".