2009 - $198 Million capex
One of the 2009 exploration wells, I'm most excited about is Moqueta -1. Moqueta -1 is a wildcat (exploration) well located north east of Costayaco, it's another 60mmbo target, similar to the Costayaco oil field. Quite a bit of information as been posted here (on Investor Village) the Moqueta -1 oil target.
Hopefully, Moqueta-1 will be a discovery well made rior to the time that GTE finalizes the capacity of the Putumayo phase 2 pipeline, (to Ortio). I suppose a Moqueta -1 discovery well would require a 100 kilometer twin pipeline following the pahse 2 from Costayaco to Ortio
The latest press is the first time GTE has called Moqueta, Moqueta (since 2005) instead of Norte Costayaco, so Moqueta is (IMO) a separate structure (oil field), and not a continuation of the Costayaco structure (oil field). A discovery in Moqueta -1 would be a huge plus for the valuation.
Juanambu -2 appraisal well should have a high chance of success (+ 80%) and there is spare capacity in the Juanambu pipeline /infrastructure, so J-2 is a low risk low cost appraisal well with a low investment cost to increase gross production flow. J-2 is long over due, get it drilled!
Catguas block in the Cataumbu basin bordering Venezuela has some very big oil fields 280 mmbo fields (Tibu) adjoining GTE's block. Rio Oro just to the N was a wildcat drilled by Amoco that logged 325 feet of pay. The pay is deep and the two wildcat wells into the Catguas block will be expensive. The NE province of Colombia near the Catguas has Colombia's largest refinery, and a large under used network of oil pipeline and oil processing facilities. The under utilization comes from the presence of the drug (cocaine cartel) and FARC that still have a strong hold in this province. Oiljack and I both did and posted extensive research on the elephant potential of the Catguas. Solana held the Catguas block and has the expertise. It was very disappointing that Solana never drilled the Cataguas block, they identified five very big potential targets. 2D seismic has been available for a long time, and 3D was obtained in the last year on the targets. I'm not clear on GTE's view on the risk of the Catguas, but I'd guess the risk is high on geology, politics, and security. Even so, the Catguas targets have one of the highest risk to reward of any junior mid-cap wildcat well, spend $8 million each on two wells with the potential to discover a 200 mmbo oil field in one of the most productive on-shore basins outside the middle east. Somewhat concerned that only one exploration well would be drilled in 2009.
Solana's early 2005 presentations have provided excellent information on the Catguas block. If I remember correctly, the geology appears to be complex, not continuous and flat reservoirs like the Caballos and Villeta. The anaconda snake understands the Catagus geology better!
Petrobras and Ecopetrol have been producing large amounts of oil from the Tibu oil field for thirty years, and are curretnly producing even with the currenty security/FARC/Coca problems in this area. Any comments on the local security issues surrounding the Catguas blcos are welcome! Oiljack recently noted the security risk in the Catguas is a hinderance to Gran Tierra exploration of the Catguas block. Oiljack, the anaconda snake, and architect have posted on the high impact of the Catagus as far back as Stockhouse, (before the GTE investor village BB).
Solana's drilled two shallow wells in the Catguas with average/disappointing results, I'm assuming GTE's two exporation wells in 2009 are into the deep targets - looking for "giant" (elephant sized light oil fields) .
Yamiyaco -1 on the Azar block I like. I've posted on Yamiyaco before - I've refered to this target as Mandiyaco. Yamiyaco (Mandiyaco) is on trend in the east west direction with Costayaco and Juanambu, (on the eastern flank). Yamiyaco (Mandiyaco) targets all of the same reservoirs as Costyaco and Juanambu -- Rumiyaco, Villeta U T and Caballos. Much of GTE's early production on the Guayuyaco block was north of the Costayaco and Juanambu. The wells in the nnothern portion of the Guayayaco block had big early productio9n flows - I believe production declines occurred after 5 - 7 years. Some wells in the north area of the Guayayaco had big early production flows similar to Costayaco and Juanambu. The Yamiyaco (Mandiayaco) target is on the border of SW border of the Guayuyaco block.
Proa -2 in the Noreste basin of Argentina is a fairly big target, and close to infrastucture Argentina's netbacks are low when oil is high, and reasonable now when oil WTI is below $45. Above $65 WTI Argentina takes all the windfall profits.
PS - Argentina IMO is shooting themselves in the head, by discouraging future investment.
The other wells GTE has mentioned in the 2009 capex are all low risk appraisal wells near existing infrastructure, which minimizes the requirement for 2009 infrastucture capex. All and all Gran Tierra has proposed a very conservative 2009 exploration and development program. The 2009 program is all light oil straight pipe with a break even of approximately $25 / bbl. $35 WTI for Gran Tierra and most every oil company cuts, is self sustaining and cuts off (restricts) funds to explore for more oil. Gran Tierra 2009 capex was reduced by 40% due to $35 WTI.
The Putumayo TEA block B (Rumiyaco block) in- between Costayaco and Orito may have big oil potential. GTE's December presentation shows the trend from Costayaco to Orito continuing thru the TEA block A and B.
The TEA blocks A and B have the similar geological characterics, to Costayaco and Orito oil fields. Oil migrating from the Cordillera mountians is trapped (stratagraphic) in the forelands / plains. Reference a cross section of Orito posted earlier, on IV to see the relation of the blnew blocks to the Cordillera foothills.
The size of the Putumayo A & B blocks are huge, and provide great potential in 2010 for GTE, exploring and developing potential oil fields similar to Orio and Costayaco, ie traps in-between the foothils and forelands/ plains.
The Rumiyaco block (TEA b) is drill ready in 2010, and the TEA blocks A later in time, (2011).
Rumiyaco block B is very near the Ortio oil facilities and Orito pipelines which is a big plus as it minimizes future capex (investment) costs. Gran Tierra (Arogsy Energy's) has 30 years of oil experience in the Putumayo basin which will be helpful in developing TEA blcoks A and B and Norte Costayaco (Moqueta -1)
All for now! Wishing everyone best wishes for a happy and prosperous New Year !
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