TORONTO, Feb. 3 /PRNewswire-FirstCall/ - Pacific Rubiales
Energy Corp. (TSX: PRE; BVC: PREC) announced today an operational
update on its exploration portfolio in Colombia, Peru and Guatemala.
Ronald Pantin, Chief Executive
Officer of the Company, commented: "Within the context of our
exploration growth strategy, the ongoing and continuous success at
CPE-6 and Quifa underlie our belief in the potential of the Llanos
Basin in Colombia. These
exploration projects, in addition to the enormous potential of our
entire exploration portfolio, pave the way toward our four to five
year target of 500,000 boepd of gross production."
COLOMBIA
LLANOS BASIN
------------
CPE-6 Block
The Company continues its exploration campaign in the Guairuro
prospect drilling the Guairuro-3, Guairuro-4 and Guairuro-5
stratigraphic wells in the north-western part of the CPE-6
Block.
The Guairuro-3 well, drilled at a distance of 13 km west of
Guairuro-1, reached a total depth of 2,523 feet true vertical depth
below sea level ("TVDSS"), and found the top of the C-7 interval of
the Carbonera Formation at 2,408 feet TVDSS, and the top of the
Paleozoic Basement at 2,451 feet TVDSS. The Guairuro-4 well,
drilled at a distance of 15.1 km south of Guairuro-2, reached a
total depth of 2,486 feet TVDSS, and found the top of the C-7
interval of the Carbonera Formation at 2,185 feet TVDSS, and the
top of the Paleozoic Basement at 2,402 feet TVDSS. The Guairuro-5
well was drilled 5.7 km and 7.5 km northeast of the Guairuro-1 and
Guairuro-2 wells, respectively, and reached a total depth of 2,592
feet TVDSS, finding the top of the C-7 Interval at 2,328 feet
TVDSS, and the Paleozoic Basement at 2,533 feet TVDSS.
Similar to the previously drilled Guairuro-1 and 2 stratigraphic
wells, the Guairuro-3, 4 and 5 wells were drilled with a 6 1/8"
slim design, and were continuously cored along the Carbonera C-7
interval. Total core recovery was 147.3 feet (73.7%), 143.9 feet
(71.9%) and 41 feet (51%) in the Guairuro-3, 4 and 5 wells,
respectively, for a total cored section of 280 feet. All the wells
showed significant oil impregnations, close to 30 feet at each well
in all the cored intervals within the C-7 interval. The C-7
interval also showed high shale content. The basal unit was not
observed in the Guairuro-3 and 4 wells, and in the Guairuro-5 well
it was very thin. Therefore, it is interpreted that this basal unit
pinched-out east of the Guairuro-3 well, north of the Guairuro-4
well and east-northeast of the Guairuro-5 well, but very close to
the wells' locations. The core description showed the presence of
fine to very fine oil-impregnated sands, with intercalations of
shales and siltstones. Because of this shale content in the
Guairuro-3 well, the petrophysical evaluation only indicated 6.5
feet of net pay. The Guairuro-4 well did not indicate net pay zones
in these intervals; and the Guairuro-5 well exhibited 14 feet of
net pay and an oil-water contact at 2,433 feet TVDSS. Aside from
the shale facies characteristics that the C-7 interval showed at
the Guairuro-4 well, the presence of a normal fault located
immediately to the north of its location could also restrict the
hydrocarbon charge to this part of the prospect and oil may have
spilled further south to where the C-7 interval pinches-out. The
presence of oil in the three wells, in the shaly sandstones of the
C-7 interval, is evidence that the petroleum system reached the
area where these wells are located, and furthermore, may indicate
that the boundary of the prospect may be located to the west, south
and northeast, and possibly close to the location of the three
wells.
With the information obtained from these three wells, a minimum
preliminary area of 63,000 acres for the prospect has been
estimated with a trap size extended an additional 6, 9 and 7.5 km
to the south, west, and northeast, respectively, of the previously
drilled wells. The Company is also preparing to drill the last well
of this initial campaign, the Guairuro-6 well, 10 km south of the
Guairuro-4 well, so as to fulfil its contractual commitment with
the Colombian National Hydrocarbon Agency (the "ANH") and to
evaluate a possible reservoir compartmentalization of the pay
units, as well as the south-headed oil-spilling from the location
of the Guairuro-4 well. With the upcoming drilling of the
Guairuro-6 well, the Company will complete its commitments under
the Technical Evaluation Agreement ("TEA") phase of the CPE- 6
contract.
In the north zone of the Guairuro prospect, a total of 9 wells
have been drilled to date, and in each well we have had reliable
evidence that the petroleum system worked for this area and that
the oil was able to migrate and to load an area as vast as 63,000
acres or more. These results reaffirm the petroleum potential of
the CPE-6 Block, and the Company's belief that in the next
exploration phase the CPE-6 Block will prove to be one of the most
significant oil finds in the Llanos Basin of Colombia.
The Company is currently preparing all the technical
documentation and permits to start an exploration/appraisal
campaign to further delineate this oil accumulation with
exploratory, appraisal and stratigraphic wells that will be drilled
in the second half of 2011, subject to obtaining the appropriate
licenses.
The CPE-6 Block is a TEA awarded by the Company in 2008 with the
ANH, in which Meta Petroleum Ltd. (a wholly-owned subsidiary of the
Company) is the operator and holds a 50% working interest and
Talisman Energy Inc. holds the remaining 50%.
Quifa Block
As a continuation of its exploration/delineation campaign in
prospects "A", "F" and "Q" in the Quifa Block, located in the
northern part of the block, the Company drilled four wells: (i) the
Jaspe-1 ST2 appraisal well in prospect "A" (ii) the Jaspe-3
stratigraphic well in prospect "A" (iii) the Ambar-1 exploratory
well in prospect "F" and (iv) the Ambar-3 stratigraphic well, also
in prospect "F".
The Jaspe-1 ST-2 appraisal well was drilled as a deviated well
from the surface location of the Quifa-6 well on prospect "A" and
slanted 60 degrees to the northeast. The well found the top of the
Carbonera basal sands at 2,722 feet TVDSS, and the petrophysical
evaluation identified a total of 19 feet of net pay, 13 feet with
31% porosity at the basal sand unit and 6 feet with 30% porosity in
the Carbonera Intermediate sandstones, and an oil-water contact at
2,744 feet TVDSS. This interval at the Carbonera Intermediate Unit
is considered a new objective in the prospectivity of Quifa North.
The well is being readied for a long-term production test.
The Jaspe-3 stratigraphic well was drilled in prospect "A" at a
distance of 6.2 km and 7.5 km northeast of the Jaspe-1 ST-2 and
Quifa-6 wells, respectively. The Jaspe-3 was a deviated well,
drilled at an angle of 30 degrees from a surface location and
reaching a total depth of 3,057 feet TVDSS and reaching the top of
the Carbonera basal sands at 2,706 feet TVDSS and the top of the
Paleozoic at 3,006 feet TVDSS. The petrophysical evaluation of the
well showed 29 feet of net pay at the interval, an average porosity
of 31%, and the oil water contact at 2,746 feet TVDSS, 2 feet
deeper than Jaspe-1 ST-2 well. These results confirm the extension
of the "A" prospect to the northeast part of the Quifa Block and
may extend the prospect 4.5 km in the same direction.
The Ambar-1 exploratory well, in prospect "F", was drilled as a
deviated well from a surface location at a distance of 4.2 km
southwest of the Quifa-26X stratigraphic well. The well found the
top of the Carbonera basal sands at 2,556 feet TVDSS and the
Paleozoic Basement at 2,716 feet TVDSS. The petrophysical
evaluation of the well indicates a hydrocarbon column of 33 feet of
sandstones and siltstones, with 16 feet of net pay and 35% average
porosity, and the oil-water contact at 2,589 feet TVDSS. This well
is also in the process of being ready for a long-term production
test.
The Ambar-3 stratigraphic well was also drilled in prospect "F",
at a distance of 3.2 km southwest of the Ambar-1 well. The Ambar-3
reached a total depth of 2,819 feet TVDSS and found the top of the
Carbonera basal sands at 2,540 feet TVDSS and the top of the
Paleozoic at 2,686 feet TVDSS. The basal sand unit at the well
showed high shale content, resulting in only 2 feet of net pay at
the interval and an oil-water contact at 2,552 feet TVDSS. This
shale content in the basal sands is interpreted as being associated
with flood plain shaly facies that develop close to the deposition
of channel sandstones facies, but with restricted geographical
extent. The presence of shale at this location should not be
interpreted as a regional facies change, but as a local shale
development. The Company is planning to review the geological
interpretation of this area in order to plan additional wells which
help to understand those facies changes in the western reaches of
prospect F.
As of today, in the northern part of the Quifa Block, the
Company has drilled 6 wells showing commercial hydrocarbon columns:
(i) Quifa-6; (ii) Quifa-24X; (iii) Quifa-26X; (iv) Jaspe-1 ST-2;
(v) Jaspe-3; and (vi) Ambar-1. Thus far, the exploratory success of
the campaign reaffirms the large scale hydrocarbon potential of
this part of the Quifa Block, where the Company has already
certified 251 mmbo certified gross resources (see the Company's
press release dated April 26, 2010).
In order to convert these resources into 2P reserves, the Company
plans to drill seven additional exploratory/appraisal and
stratigraphic wells in this part of the Quifa Block during the
first quarter of 2011. The Company is already moving a rig to drill
the Zircon-1 location and the Jaspe-2 location. In addition, as
part of the exploratory activity in the Quifa Block, the Company
has completed 294 km of additional 2D seismic in the furthermost
northern and eastern parts of the block, which will aid in the
evaluation of the prospectivity of these two areas. The results of
the exploration campaign have ensured the petroleum potential of
the northern part of the Quifa Block, where the Company is making
the necessary investments to allow for large scale production of
between 20,000 to 30,000 barrels of oil per day ("bopd") by the end
of 2011.
The Quifa Block is an exploratory block in which Meta Petroleum
(a wholly-owned subsidiary of the Company) holds a 70% working
interest and Ecopetrol holds a 30% working interest. Production
shares from each commercial field in the Quifa Block will be split
40% for Ecopetrol and 60% for Meta Petroleum.
LOWER AND UPPER MAGDALENA BASINS
--------------------------------
La Creciente Block
In the LCA-south prospect, located in the southern part of La
Creciente "A" and the La Creciente "D" gas fields, the exploratory
well Apamate-1X spudded on December 1,
2010. The well is targeting gas in Cienaga de Oro sands with an estimated total depth of
12,170 feet measured depth ("MD"). The well reached 11,200 MD at
the top of Cienaga de Oro Formation. While performing a
hole-conditioning trip at the bottom of the 8½" hole and before
running the 7" liner, a gas kick was observed, forcing the Company
to flare gas until the well was controlled. The liner was set at
11,195 feet and the Company decided to drill the Upper Cienaga de
Oro sandstones up to 11,330 feet
and perform an open-hole DST to this section. The well flowed water
with no traces of gas. It is believed that the units that flowed
gas while drilling the Lower Porquero section are behind the 7"
liner and will be perforated and tested at a later stage. The
Company is currently preparing the well to drill further down and
evaluate the Lower Cienaga de Oro Formation.
The La Creciente Block is an E&P contract in the Lower
Magdalena Basin, in which the Company holds a 100% working
interest.
Buganviles Block
In the Buganviles Block, the Company has continued its
exploratory activity by performing a production test on the
Visure-1X exploratory well, and by drilling the Tuqueque-1X
exploratory well.
In the Tuqueque prospect, located in the northern part of the
Buganviles Block, the Tuqueque-1X exploratory well spudded on
November 4, 2010, with the Cretaceous
limestones of the Caballos Formation as the main exploratory
target. After a tie-in between a vertical seismic profile in the
well, and the available 2D seismic data, the estimated final depth
of the objective was revised from 7,600 feet to 11,300 feet MD, and
the new depth for the Caballos Formation was estimated at
approximately 10,600 feet. The well is currently drilling an 8½"
hole at the depth of 9,303 feet MD in the Villeta Group (Tetuan
Formation). The preliminary petrophysical evaluation in the upper
part of the well showed two additional prospective intervals in the
upper levels: (i) the Monserrate Formation, with 31 feet of
indicated net pay; and (ii) the El Cobre Formation, with 9 feet of
indicated net pay.
The results of the Visure-1X well, drilled in the Visure
prospect, located in the southern part of the Buganviles Block,
were released in November 4, 2010.
The well was tested in the Lower Guadalupe Formation, resulting in
a stabilized average production rate of 46 bbl/d with 14 barrels of
water per day. Oil gravity was 15.6 API. The Visure-1X well has now
been suspended and the drilling rig released pending evaluation of
this production testing. Different production techniques will be
evaluated based on the production test analysis to economically
produce the significant oil in place encountered in the Lower
Guadalupe Formation. Depending on the results, the Company will
consider a possible test in the Upper Guadalupe and Barzalosa
Formations.
The Buganviles Block is an Association Contract with Ecopetrol,
located in the Upper Magdalena Basin. Pacific Stratus Energy (a
wholly-owned subsidiary of Pacific Rubiales) holds a 19.875%
participation in the prospect where the Tuqueque-1X well is being
drilled. The remaining interest is held by Petrodorado Energy Ltd.
(TSXV: PDQ) and Loon Energy Corporation (TSXV: LNE).
PUTUMAYO BASIN
--------------
Topoyaco Block
The Topoyaco 2 well, in the Topoyaco Block, has been suspended
after re-evaluating the well with a higher capacity
Electro-Submersible Pump ("ESP") in the upper Villeta N-sands,
which the operator now believes could be a sandy facies known in
other areas of the Putumayo foothills as the Neme member of the
younger Rumiyaco formation. This new test was performed in order to
establish the true production potential of the well, which was
tested originally with a lower-capacity ESP and resulted in very
erratic oil and water production rates. The well is now suspended,
awaiting a resource and economic evaluation in order to take a
final decision. The exploration campaign in this block will
continue during 2011, and the Company is performing all the
necessary steps to drill what it is believed to be the largest and
deepest prospect of the block, Prospect D, which has been certified
with 46.907 mmbo of prospective resource (best estimate) (see
Alange Energy Corp.'s press release dated November 16, 2010).
The Topoyaco Block, located in the Putumayo foothills, is an
E&P contract where the Company holds a 50% working interest and
Alange Energy holds the other 50% and acts as operator. Given the
importance of the next phase of the Topoyaco exploration program,
Alange Energy agreed to transfer control of the operatorship of the
block to Pacific Rubiales (as announced by Alange Energy on
January 19, 2011). Transfer of
control leverages the Company's extensive technical capabilities in
Colombia and its financial
capacity to operate the joint venture.
PERU
Exploration activities started in Block 138, located in the
Ucayali Basin, on December 9, 2010.
The acquisition of 537 km of a 2D seismic program will allow the
definition of the main structural trends in the block and should
provide confirmation of the presence of several structural leads,
which were identified from three previously acquired regional
seismic lines. The Company expects to finish the seismic
acquisition by April 2011 and will
then proceed with processing and interpretation.
The Block 138 is an E&P contract in the Ucayali basin in
northern Peru, in which the
Company holds 55% working interest. There is no exploration
activity taking place on this block at this time. Petrodorado
Energy holds the remaining 45%.
GUATEMALA
In October 6, 2010, the Company
entered into a farm-in agreement with respect to "A-7-98", which
corresponds to the area known as "A-7-98" and which is made up of
the "N-10-96" and "O-10-96" blocks in Guatemala, securing a 55% working interest and
the operatorship of the area. The remaining working interest is
held by Compania Petrolera del Atlantico, which is owned by
Flamingo Energy Investment (BVI) Ltd. and CHx Guatemala
Limitada.
During 2010, the Company started field activities aimed at
identifying such aspects as: (i) logistics; (ii) access and design
of future geologic and geophysical field work; (iii) availability
of drilling and seismic acquisition companies in Guatemala; and (iv) environmental permits and
other support related areas. All these activities will help in the
establishment of the exploratory program that will be submitted for
approval in the first quarter of 2011.
The exploratory activities for 2011 in Guatemala will include: seismic reprocessing
of 300 km of 2D seismic; acquisition and processing of additional
300 km of 2D seismic; 6,800 km of aero-magnetic and
aero-gravimetric data; 6,600 km2 of remote perception surveys; a
surface geology campaign (including samples analysis); and the
beginning of an integrated geological interpretation to define
exploratory prospect locations to be drilled in 2012.
The Company's exploration program for 2011 is budgeted at
$340 million and includes exploration
across 26 blocks, in which 20 exploratory wells will be drilled, 36
appraisal wells and 3 stratigraphic wells. In addition, 539 km of
2D seismic and 440m2 of 3D seismic is planned during the year.
Pacific Rubiales, a Canadian-based company and producer of
natural gas and heavy crude oil, owns 100 percent of Meta Petroleum
Corp., a Colombian oil operator which operates the Rubiales and
Piriri oil fields in the Llanos Basin in association with Ecopetrol
S.A., the Colombian national oil company. The Company is focused on
identifying opportunities primarily within the eastern Llanos Basin
of Colombia as well as in other
areas in Colombia, northern
Peru and Guatemala. Pacific Rubiales has a current net
production in excess of 84,000 barrels of oil equivalent per day,
after royalties, with working interests in 40 blocks in
Colombia, Peru and Guatemala.
The Company's common shares trade on the Toronto Stock Exchange
and La Bolsa de Valores de Colombia under the ticker symbols PRE and
PREC, respectively.
Boe may be misleading, particularly if used in isolation. A boe
conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency
conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements. All
statements, other than statements of historical fact, that address
activities, events or developments that the Company believes,
expects or anticipates will or may occur in the future (including,
without limitation, statements regarding estimates and/or
assumptions in respect of production, revenue, cash flow and costs,
reserve and resource estimates, potential resources and reserves
and the Company's exploration and development plans and objectives)
are forward-looking statements. These forward-looking statements
reflect the current expectations or beliefs of the Company based on
information currently available to the Company. Forward-looking
statements are subject to a number of risks and uncertainties that
may cause the actual results of the Company to differ materially
from those discussed in the forward-looking statements, and even if
such actual results are realized or substantially realized, there
can be no assurance that they will have the expected consequences
to, or effects on the Company. Factors that could cause actual
results or events to differ materially from current expectations
include, among other things: uncertainty of estimates of capital
and operating costs, production estimates and estimated economic
return; the possibility that actual circumstances will differ from
the estimates and assumptions; failure to establish estimated
resources or reserves; fluctuations in petroleum prices and
currency exchange rates; inflation; changes in equity markets;
political developments in Colombia
or Peru; changes to regulations
affecting the Company's activities; uncertainties relating to the
availability and costs of financing needed in the future; the
uncertainties involved in interpreting drilling results and other
geological data; and the other risks disclosed under the heading
"Risk Factors" and elsewhere in the Company's annual information
form dated March 12, 2010 filed on
SEDAR at www.sedar.com. Any forward-looking statement speaks only
as of the date on which it is made and, except as may be required
by applicable securities laws, the Company disclaims any intent or
obligation to update any forward-looking statement, whether as a
result of new information, future events or results or otherwise.
Although the Company believes that the assumptions inherent in the
forward-looking statements are reasonable, forward-looking
statements are not guarantees of future performance and accordingly
undue reliance should not be put on such statements due to the
inherent uncertainty therein.
Prospective resources are those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations by application of future development
projects. Prospective resources have both an associated chance of
discovery and a chance of development. Prospective resources are
further subdivided in accordance with the level of certainty
associated with recoverable estimates, assuming their discovery and
development, and may be sub-classified based on project maturity.
There is no certainty that any portion of the resources will be
discovered. If discovered, and they would be technically and
economically viable to recover; there is no certainty that the
prospective resource will be discovered. If discovered, there is no
certainty that any discovery will be technically or economically
viable to produce any portion of the resources.
SOURCE Pacific Rubiales Energy Corp.
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