Emerald Energy Updates on Development Operations in Colombia

Emerald Energy has provided the following update on operations in Colombia.

Mirto No.1 Exploration Well

Flow testing operations have been completed in the Cretaceous aged Villeta N sand in the Mirto No.1 well, the shallowest of four sands flow tested in this well. The 7 feet interval at 10,410 feet produced 15 degrees API oil at an average rate of 247 barrels per day over a 48 hour period, under artificial lift using a jet pump and through a 128/64 inch choke, with an average water cut of 64%.

Following the completion of operations in the Mirto No.1 well, the drilling rig will be demobilized from the location. Based upon the preliminary evaluation of the results of Mirto No.1, the Company plans to elect to enter the next phase of the contract with a minimum work commitment of 1 well.

Gigante No. 2 Well

Following the previously reported flow testing operations in the Caballos formation using an electrical submersible pump, the drilling rig was demobilized from the well and was replaced by a smaller and lower cost workover rig for the remainder of the evaluation and testing operations.

Based on the Company's evaluation of the results to date in the Caballos formation, Emerald has informed Ecopetrol of the discovery and has requested commerciality. Ecopetrol may, under the terms of the Association Contract, participate with a 50 percent interest in the development of the Caballos formation and reimburse Emerald 50 per cent of the cost of the exploration.

The Company's preliminary evaluation of the wire-line logging and flow testing operations conducted to date indicated that the production capability of the Caballos formation may be significantly enhanced by conducting a hydraulic fracturing operation. The design of this operation has been completed, the equipment required has been mobilised to the well-site and the hydraulic fracturing operation is currently being conducted.

Following the hydraulic fracturing operation, the Caballos formation will be flow tested. This flow testing is planned to include an extended production and shut-in period to assist in determining the extent of the Caballos reservoir. The Company expects that operations on the Caballos formation may take up to one month to complete.

Upon evaluation of the results from the flow testing, the Company and its partner, Ecopetrol, plan to commence evaluation and flow testing operations in the overlying Tetuan formation, which may include the application of hydraulic fracturing, or may complete the well as a producer from the Caballos formation.

Capella No. SH1 Slim-Hole Well

Capella No.SH1, the first of two slim-wells planned to be drilled in the Capella field, was drilled to a depth of 2,903 feet before encountering mechanical drilling problems which resulted in this wellbore being abandoned. Based on an evaluation of the operations, the drilling rig has been changed and some equipment modified to enable the rig to drill to the target depth and drilling operations have commenced on a replacement well, Capella No.SH1X, in the same location. The well is planned to take approximately one month to drill and evaluate.


Gross oil production averaged 4,196 barrels per day during the month of August, with the Capella heavy oil field contributing 243 barrels per day to this total.

Emerald's Chief Executive Officer, Angus MacAskill, said, "We are very pleased with the results achieved in the Colombia asset portfolio, with oil produced from a second horizon in the Mirto No.1 exploration well, the identification and commencement of an opportunity to enhance the production capability of the recently discovered Caballos oil reservoir in the Gigante No.2 well, and steady production from the producing fields. We look forward to the results of the evaluation and flow testing operations in the Gigante No.2 well and slim-hole drilling in the Capella field."