Solana Petroleum Corp -
Solana updates Colombia/West Virginia drilling
Solana Petroleum Corp SOP
Shares issued 16,546,964 2000-03-14 close $0.46
Wednesday Mar 15 2000
Mr. James Taylor reports
Solana Petroleum's Mateguafa No. 2A appraisal well on the Tapir Association contract block in the Llanos basin of Eastern Colombia has been drilled to a total depth of 8,701 feet. The well encountered oil and gas shows in both objective zones, the Carbonera C-7 Sandstone and the Guadalupe formations. Log runs at Mateguafa No. 2 have been completed and analyzed. Based on the logs, well-cutting samples and mud log data, the decision has been made to run and cement seven-inch casing in the hole in preparation for perforating and production testing of the well.
In the discovery well, Mateguafa No. 1, the upper C-7 sand tested 777 barrels per day of 32-degree API gravity, light sweet crude oil. In the Mateguafa No. 1 discovery well, the Guadalupe formation had good oil shows, but tested fresh water. This was thought to be the result of the water channelling behind casing from another formation.
The independent petroleum engineering firm of H.J. Gruy & Associates of Houston, credited the Carbonera C-7 sands alone in the Mateguafa structure (100 per cent) with 5.5 million barrels of probable reserves, 29.4 million barrels of possible reserves and 65.9 million barrels of prospective resources, which are not categorized as reserves. Any productive zone from the underlying Guadalupe in Mateguafa No. 2A could substantially increase these numbers.
In the event Mateguafa No. 2A well is successfully production-tested, interference testing with the Mateguafa No. 1 discovery well will be conducted, with a view toward establishing the commerciality of the Mateguafa field at the earliest possible date. The field is approximately 20 kilometres from trunk line connections to BP/Amoco's trans-Andean pipeline to the marine export terminal at Coveneas on the Caribbean coast.
Solana's partners in the Tapir block are Mohave Colombia Corporation (operator) with a 38.33-per-cent interest and Doreal Energy Corporation (11.67 per cent). Upon final approval by Ecopetrol and the Canadian Venture Exchange of Solana's recent purchase of an 11.875-per-cent interest in Tapir from Seven Seas Petroleum Colombia Inc., Solana's holding will be 50 per cent.
Solana also holds the right to earn a 50-per-cent interest in the Cantildeo Caranal Association contract, also located in the Llanos basin about 25 miles east of the 1.2 billion barrel Cantildeo Limon field. A detailed seismic survey for Cantildeo Caranal is currently under consideration by Solana and project operator, Mohave Colombia Corporation.
In Roane county, W.Va., Solana is a participant in the drilling of the Hoff No. 1 exploratory deep gas test to the Ordovician Trenton-Black River formation, in conjunction with EXP Resources Ltd. and operator, Martin Twist Energy Co., LLC. The top of the Trenton Limestone objective is anticipated at about 10,000 feet, with total depth programmed for 10,500 feet. The well is presently drilling below 7,800 feet after running and cementing 9 5/8-inch casing to 6,000 feet. At about 10,000 feet, seven-inch casing will be run and cemented prior to entering the Trenton Limestone, where high pressure may be encountered.
Late last year, Columbia Natural Resources, Inc. announced two Trenton-Black River deep gas discoveries in the immediate vicinity of the Hoff No. 1 well which it designated the Cottontree field. Columbia's initial discovery in this formation produced natural gas at an open-hole flow rate in excess of 50 million cubic feet per day, with bottom-hole pressures of 6,600 pounds per square inch. Columbia announced that these pressures were sustained during the first month of production at 7.4 million cubic feet per day. Both wells are currently delivering natural gas via an eight-inch trunk line to a high-pressure pipeline about five miles away. The Hoff No. 1 is located 3,000 feet to the west of Columbia's third well now drilling in the area, and is 7,000 feet northeast of its discovery well.
Solana and EXP each have an option to participate up to 35 per cent each in all of Twist Energy's leases in West Virginia, which currently exceed 30,000 acres in total. Solana and its partners have just completed a 28-mile seismic survey in the Hoff lease area, so as to better understand the subsurface geology of this rapidly unfolding deep Appalachian basin play, and to be able to precisely delineate future drilling locations. An extensive gas transmission infrastructure exists in the immediate area.
In California, Solana and its partners in the Solana California gas exploration syndicate hold an option to elect to drill a well on a 40-acre tract on the Cal Canal anticline, offsetting Berkley Petroleum's Cal Canal No. 1 exploratory well by about 1,500 feet. Berkley has suspended the well, awaiting further stratigraphic information from its Berkley East Lost Hills No. 1, reportedly drilling below 18,000 feet. When the final status of the Cal Canal No. 1 is determined by Berkley, Solana, et. al. will decide whether or not to drill an offset well.
The company has also recently completed a brokered private placement of 658,936 units at 60 cents per unit, consisting of one common share and one-half of a warrant. One whole warrant entitles the holder to purchase one common share on or before June 1, 2000, at a purchase price of 90 cents. The corporation paid a finder's fee of 7.5 per cent on 156,000 units of the offering to Yorkton Securities Inc. The proceeds of $395,362 will be used to finance the company's current drilling programs.
Effective Jan. 27, 2000, Nicolas S. Swagor resigned from the board of directors in order to pursue other business interests. In view of Mr. Swagor's resignation and the recent death of director, Wayne R. Stromme, the company will be filling these board vacancies in the very near future.
WARNING: The company relies on litigation protection for "forward-looking" statements.
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