Gold Oil Underscores '08 Operational Highlights in South America
Gold Oil's Chairman has issued an unaudited interim report to shareholders for the period May 1, 2008 to October 31, 2008.
"I am delighted to report the establishment of the Company as the Operator for, and majority partner in, the Nancy, Burdine and Maxine
oil fields in the Putumayo Basin in Colombia. From our initial 40% participation in 2006, we managed to buy one of the other partners,
Inversiones Petroleras de Colombia S.A. ('Invepetrol') for a total consideration of $4 million. Invepetrol owns an 18.05% participating
interest in the Union Temporal II & B that is the Operator and License holder of the Nancy, Burdine and Maxine oil fields. This purchase will take the Company's total interest in Union Temporal to 58.05% (27.29% of net production), operatorship and control of the fields. The transaction was completed by a final payment of $2.8 million in early November.
"A draft independent reserves report shows that considerable reserves have yet to be extracted from the fields and a detailed development
plan is under way. We have at last received the environmental approval to re-enter the Burdine wells on the 26th December 2008. All
the equipment has been ordered and we are currently seeking a wire-line unit to open up the wells for production with a view to a later work-over to open up those zones bypassed and or not perforated. Later this year the plan is to shoot a small 2 D seismic survey over both Nancy and Burdine to identify new development well locations.
"The Rosa Blanca-1 exploration well reached a total depth (TD) of 2,960 feet in late December 2008 with good logging results justifying
the running of the 95/8' casing and a 7 inch slotted liner. The well was suspended over the Christmas period pending the delivery of test
and fracturing equipment. The group has agreed to enter in phase 2 of the exploration program.
"In the Azar Block the Palmero-1 well that was re-entered in mid year produced 45 bopd of 15o API gravity crude under natural flow. The
plan was to install production facilities and produce the well for two months to gain reservoir and production data before installing a down-hole pump and begin long term production. With the fall in the oil price, and the costs involved in running a pipeline from an adjacent light oil field before exporting the crude, it was decided to suspend the development until the oil price picks up or the cost of services falls or there is additional infrastructure in the area to justify the capital involved.
"The group entered into phase three of the exploration license with a plan to shoot some additional 2D and 3D seismic before drilling the
first exploration well before Q3 2009.
"In Peru the Company completed, in mid 2008, the second exploration well, SA-2X, on Block XXI. The location of the well was based on a
DNME survey that would have been of enormous benefit to the company to appraise Block XXI because of the size of the block and the low cost of the survey. However, the survey was unsuccessful resulting in the well also being unsuccessful. As seismic is unable to assist with identifying Palaeozoic plays the plan for the block now is to shoot some 2D seismic to target Verdun gas plays. When these Verdun
structures are drilled they will also be deepened to explore the Palaeozoic.
"In addition, the Company successfully reacquired the 50% of the Offshore Z34 that it had previously farmed out to Plectrum Resources
Plc and also received a $1.5 million settlement for giving up its carry arrangement. The plan is to proceed with the 2000 km 2D seismic
survey this year and seek to farm-out a percentage of the block.
"With the relationship between Cuba and the European Community improving the Company continues to seek to engage the Cuban
authorities in discussions on potential exploration blocks identified in Cuban waters.
"The fall in oil prices has not been reflected in the cost of services, particularly in Colombia, so we expect projects in Colombia to be delayed or minimised until the cost of services reaches reasonable levels again."
- Gold Oil In Talks for Partner Offshore Peru (May 08)
- Gold Oil Granted License Extension in Peru (Jan 30)
- Gold Oil Extends Survey, Seeks Farm-In Candidates Offshore Peru (Jul 11)