News release from SEV this morning pasted below. The contract with Ecopetrol concerns the hypothetical monster reservoir underneath the hypothetical very big reservoir that SEV has been trying to delineate for quite a number of years now (it's been like watching grass grow). To be fair, the Colombian government has put many obstacles in the way, but finally there appears to be clear sailing on that front. The exploration well mentioned is a pure wildcat well. They've detected movements in the deep reservoir caused by the moon which it is said occurs only for huge reservoirs (Aggie would appreciate your comments on this phenomenon). The annual meeting is being Webcast this morning.
Wednesday February 28, 6:00 am Eastern Time
Press Release
SOURCE: Seven Seas Petroleum Inc.
Seven Seas Signs Deep Dindal Association Contract for Subthrust Dindal Prospect
Dindal Association Contract Extended, Cristales Association Contract Signed
HOUSTON, Feb. 28 /PRNewswire/ -- Seven Seas Petroleum Inc. (Amex: SEV - news; Toronto: SVS.U - news) announced today that it recently signed the Deep Dindal Association Contract with Ecopetrol, the Colombian national oil company, for the Subthrust Dindal Prospect, which is located at depths below the Guaduas Oil Field. The Deep Dindal Association Contract, which is generically referred to as an ``on top'' contract because it originates from an existing contract, has the same surface area containing 65,000 acres as the Dindal Association Contract, but applies only to the areas below the base of the Guaduas Oil Field.
Seven Seas owns a 100 percent interest in the Deep Dindal Association Contract subject to obligations to assign certain interests to Sipetrol and Cimarrona, its partners in the Guaduas Oil Field, as per the previously announced January 2001 Exploration Agreement. Under the Deep Dindal Association Contract, Seven Seas receives better economic terms than contained in the Dindal Contract in return for its commitment to drill an exploration well to a depth below the Guaduas Oil Field to test the Subthrust Dindal Prospect before October 24, 2002. Under the Deep Dindal Association Contract, Seven Seas' working interest begins at 70% rather than 50%, and decreases to 35% as larger volumes of oil are produced, rather than 30%. The new term is 28 years instead of the 21 years remaining on the Dindal Contract. Concurrent with the signing of the Deep Dindal Contract, Ecopetrol agreed to postpone the requirement to relinquish a portion of the Dindal Contract area for as long as the Deep Dindal Contract is in the exploration stage.
Seven Seas also recently signed with Ecopetrol the Cristales Association Contract, covering approximately 200,000 acres immediately to the east of the Guaduas Oil Field and the Subthrust Dindal Prospect. The Company's first year obligation under this contract, in which it has a 100 percent interest, is to conduct remote sensing work and other geological and geochemical studies at an expected cost of $350,000.
``The Deep Dindal Association Contract significantly improves the economics for the Subthrust Dindal Prospect,'' stated Robert A. Hefner III, Chairman and Chief Executive Officer of Seven Seas. ``By agreeing to this unprecedented contract, Ecopetrol has demonstrated its commitment to increasing oil exploration in Colombia by working with companies that have already made a commitment to the country,'' concluded Mr. Hefner. |
