Alange Awarded Colombian Exploration Blocks
Alange announced successful bids on two blocks in the recently completed 2010 Open Round conducted by Colombia's National Hydrocarbon Agency ("ANH"). The two blocks awarded to the company with 100% participation and operatorship are located in the Llanos and Cordillera Basins and cover a total area of 94,921 hectares.
Mr. Luis Giusti, Chief Executive Officer of Alange Energy, commented, "We are excited to expand and strengthen the company's exploration portfolio with these new blocks. The LLA 41 block in the Llanos Basin will significantly increase our land position and enable us to leverage our existing knowledge of this basin. The COR 33 block in the Cordillera Basin lies in close proximity to several producing fields and we look forward to discovering the potential this property brings to our near-term production pipeline."
LLA 41 Block in the Llanos Basin
This block, which has an area of 72,263 hectares, was awarded to the company as a Type 1 E&P block and carries an additional royalty of 1%. During the first 36-month exploration phase, the company is committed to the drilling of one exploratory well and the acquisition of seismic. Located in the Llanos Basin, near the giant Cano Limon field, the main reservoirs of LLA 41 are tertiary sandstones and there is potential for several structures with API gravity of greater than 25 degrees.
COR 33 Block in the Cordillera Basin
This block, which has an area of 22,658 hectares, was awarded to Alange Energy as a Type 1 E&P block and carries an additional royalty of 1%. During the first 36-month exploration phase, the company is committed to the drilling of one exploratory well and the acquisition of seismic. Located on the border of the Cordillera and Upper Magdalena Valley basins, near the Guando field, the main reservoirs of COR 33 are Monserrate Sandstones and the source rock is the Villeta Formation. The block has potential structures with API gravity of greater than 25 degrees.
The open process was available to those pre-qualified by the ANH and successful bid contracts are expected to be finalized by October 2010. The total estimated net investment will be $5.5 million and $6.8 million for LLA 41 and COR 33, respectively, over the next three years. This exploration spending will be funded with operating cash flow starting in 2011 and is subject to ANH exploration regulations.