Solana Resources Limited ("Solana" or the "Company") - Colombia Operational Upda
posted on Oct 09, 2008 10:27AM
(Edit this Message from the "Fast Facts" Section)
FYI > This is a press release dated September 23, 2008. I haven't seen it posted here yet, so here it is:
Attention Business Editors:
Solana Resources Limited ("Solana" or the "Company") - Colombia Operational Update
CALGARY and LONDON, Sept. 23 /CNW/ - Solana Resources Limited
(TSX-V: SOR; AIM: SORL), is pleased to provide the following operational
update on its activities in the Putumayo, Llanos and Catatumbo Basins.
Putumayo Basin - Chaza Block
The Costayaco field is located in the Chaza Block in the Putumayo Basin,
where Solana has a 50% working interest, with Gran Tierra Energy Inc., the
operator, holding the remaining 50% working interest. The Chaza block is
subject to an Agencia Nacional de Hidrocarburos ("ANH") contract.
The Costyaco-4 development well test results have confirmed reservoir
productivity and the Costayaco-5 delineation well test results suggest a
larger field size requiring an increase in the scale of the full field
Costayaco-4 is a deviated well drilled from the Costayaco-2 surface
location near the crest of the Costayaco field to a total measured depth of
8,884 feet (true vertical depth of 8,616 feet). The bottom-hole location is
approximately 1,775 feet northeast of the surface location. Approximately
77 feet of core was obtained from the Caballos and Villeta T formations during
A combination of drill stem testing, flow testing and production testing
was conducted on the two major reservoir sequences, the Caballos and the
Villeta T formations. The Caballos was perforated in the intervals 8,610 to
8,652 feet, 8,660 to 8,668 feet, 8,675 to 8,686 feet and 8,694 to 8,728 feet.
A stabilized gross production rate of 3,042 barrels of oil per day ("bopd") of
30(degrees) API oil with a 1% water cut was obtained with a jet pump. The
Villeta T was perforated in the intervals 8,463 to 8,472 feet and 8,475 to
8,514 feet. A stabilized gross production rate of 1,401 bopd of 30(degrees)
API oil with a 2% water cut was obtained from natural flow on a 92/64 inch
choke. The Villeta T test rates are relatively low, in comparison with other
crestal Costayaco wells, due to heavy formation damage that occurred during
the extensive coring operations.
Costayaco-5 is a vertical delineation well drilled to a total measured
depth of 8,703 feet on the west flank of the Costayaco field, approximately
3,450 feet northwest of Costayaco-1. A combination of drill stem testing and
production testing was conducted on the two major reservoir sequences, the
Caballos and the Villeta T formations.
The Middle Caballos was perforated in the intervals 8,519 to 8,544 feet
and produced 100% water. The Upper Caballos was perforated in the intervals
8,480 to 8,498 feet and 8,502 to 8,504 feet, and produced 27(degrees) API oil
at a rate of 20 bopd with a 5% water cut.
The Lower Villeta T was perforated in the intervals 8,376 to 8,381 feet,
8,384 to 8,388 feet and 8,390 to 8,396 feet. These zones produced 100% water.
The Upper Villeta T was perforated in the intervals 8,336 to 8,348 feet and
8,350 to 8,360 feet. These zones produced 30(degrees) API oil at a gross rate
of 1,152 bopd with a 1% water cut using a jet pump. These results are the
first indication of a water leg in the Villeta T in the Costayaco Field. The
depth of the oil water contact is poorly defined but is interpreted to be
located at approximately 8,375 feet (-7,090 feet subsea).
Costayaco Field Conceptual Development Plan
Prior to drilling Costayaco-5, Gran Tierra Energy Inc., the Costayaco
field operator, had prepared a conceptual, twenty well, full field development
program inclusive of fifteen oil producers and five water injectors, along
with a new pipeline from Uchupayaco to Orito and associated facilities. Under
this development scenario the Costayaco field was expected to achieve a peak
production rate of 35,000 bopd early in the first quarter of 2010. The
positive well test results at Costayaco-5 further extends the field's western
boundary and is expected to add reserves to the Costayaco field, and in
combination with additional drilling and infrastructure upgrades, possibly
increase the peak production rate.
The Costayaco Development Plan is currently being updated with the latest
data from the Costayaco-5 delineation well. A revised Costayaco Development
Plan is planned to be submitted for approval to the ANH in late first quarter
The drilling of Costayaco-6 and Costayaco-7 remain in the 2008 drilling
program, with a continuous delineation and development drilling campaign in
the Costayaco field continuing through 2009.
An eight inch, ten kilometre pipeline from the Costayaco field to the
Uchupayaco Station on the existing pipeline system was commissioned in late
July, 2008, and is currently transporting approximately 9,000 bopd. This new
pipeline has a capacity of 25,000 bopd. Initial throughput is constrained due
to capacity limitations further downstream in the existing pipeline system.
The operator is developing options to increase production utilizing trucks to
bypass infrastructure constraints and expects gross Costayaco field production
to rise to approximately 15,000 bopd by year-end 2008. Additional production
growth in 2009 will occur as a result of increased trucking. In addition,
production capacity in new development wells will grow while the new
Uchupayaco to Orito pipeline infrastructure is built.
Llanos Basin - Guachiria Block
Both Primavera-1 and Los Aceites-1 are located in the Guachiria block in
the Llanos Basin where Solana is the operator and holds a 100% working
interest with Lewis Energy Colombia holding a 30% beneficial interest. The
Guachiria block is subject to an Ecopetrol S.A. contract, the Colombian state
oil and gas company, and attracts an additional 13% Ecopetrol S.A. overriding
royalty that is applied after government royalties.
Primavera-1 reached a total measured depth of 7,405 feet on March 1,
2008, and was subsequently completed with eight feet of perforations in the
Carbonera C-7 formation. The well was then tested at various rates using a jet
pump over a 15 day period. At the maximum capacity of the jet pump, over a
continuous 24 hour period, 40(degrees) API oil was produced at a rate of
650 bopd (gross), 365 bopd net of royalty to Solana. The well produced with a
stable water cut of approximately 58% during this flow period.
Following receipt of regulatory approval, Solana initiated an extended
term test in mid August, 2008. With more appropriately sized equipment,
Primavera-1 produced 40(degrees) API oil at a gross average rate of
1,205 bopd, 675 bopd net of royalty to Solana, over a one week period. Water
cut was stable and averaged 52% during this period.
To facilitate long term production, Malabares-1, an old well slated for
abandonment, was converted into a water disposal well. A 1.8 kilometre
temporary produced water line, from Pimavera-1 to Malabares-1, was installed
and water disposal commenced mid September. A permanent water line is planned
to replace the temporary line. Oil production is trucked and sold to Meta
Los Aceites-1 Testing Program
Los Aceites-1 reached a total measured depth of 7,108 feet on August 11,
2008, and was subsequently completed with ten feet of perforations in the
Carbonera C-7 formation. As part of the clean-up flow period, the well flowed
at surface facility restricted rates in excess of 5,000 bopd gross, 2,800 bopd
net of royalty to Solana, with a 5% water cut. The duration of the test was
very brief, only 4.5 hours, and was truncated due to limited onsite tank
Solana is planning to initiate a required short test in late September
using appropriately sized equipment, and following regulatory approval,
expects to commence an extended test in mid to late October. The Company
intends to truck and sell oil production to Meta Petroleum and to truck water
to Solana's Primavera-1 location where it will be sent down the water line for
disposal in the Malabares-1 water disposal well. Ultimately, the company
expects to construct a multiphase flowline from Los Aceites-1 to Primavera-1,
where the fluids would be separated with water sent to Malabares-1 for
disposal, and the oil trucked from the one location.
As a result of the exceptional initial flow rates encountered at Los
Aceites-1, the Company is revisiting its mapping of the Los Aceites prospect
with a view to establishing potential field limits.
Catatumbo Basin - Catguas Block
Solana is the operator and holds a 100% working interest in the Catguas
Block which is located in the Catatumbo basin. Trayectoria Oil and Gas,
Sucursal Colombia holds a 15% beneficial interest in 70% of the block and a
50% beneficial interest in the remainder. This block is subject to an ANH
The acquisition of 2D and 3D seismic data for the Company's planned
Catguas seismic program continues to be a challenge due to infrastructure
limitations, difficult topography and security issues. Nevertheless, the work
is progressing steadily and anticipated to be complete by November 2008,
approximately six months later than originally planned. Accordingly, the next
two exploration wells are now anticipated to be drilled in late second quarter
Mr. Glenn Van Doorne, Chief Operating Officer of Solana, a Petroleum
Geologist, is the qualified person who has reviewed the technical information
contained in this news release.
On July 29, 2008, Solana announced that it had entered into a definitive
agreement with Gran Tierra Energy Inc. providing for the business combination
of the two companies. The proposed transaction is subject to regulatory, stock
exchange, court and shareholder approvals.
Forward Looking Statements
Certain information regarding the Company, including management's
assessment of future plans and operations, may constitute forward-looking
statements under applicable securities law and necessarily involve risks
associated with oil and gas exploration, production, marketing and
transportation such as loss of market, volatility of prices, currency
fluctuations, imprecision of reserve estimates, mechanical problems, equipment
limitations, environmental risks, competition from other producers and ability
to access sufficient capital from internal and external sources; as a
consequence, actual results may differ materially from those anticipated.
Solana Resources Limited
Solana (www.solanaresources.com) is an international resource company
engaged in the acquisition, exploration, development and production of oil and
natural gas. The Company's properties are located in Colombia, South America
and are held through its wholly owned subsidiary, Solana Petroleum Exploration
(Colombia) Limited. The Company is headquartered in Calgary, Alberta, Canada.
NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS
RELEASE. THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE
For further information: Enquiries: Solana Resources Limited: Scott
Price, Ricardo Montes, [email protected], [email protected],
(403) 770-1822, (403) 770-1822; Nabarro Wells & Co. Limited: (Nominated
Adviser), Marc Cramsie, [email protected], +44 20 7634 4705; Tristone
Capital Limited: (UK Broker), Nick Morgan, [email protected], +44
207 355 5800; Pelham Public Relations: Philip Dennis, James MacFarlane,
[email protected], [email protected], +44 207 743 6363,
+44 207 743 6375