Petrolifera increases production to 9,625 boe/d
2007-09-12 16:34 ET - News Release
Mr. Richard Gusella reports
PETROLIFERA'S PRODUCTION GROWTH RESTORED -- OPERATIONS UPDATE
As a result of its recent and continuing drilling, completion and workover programs at Puesto Morales and Rinconada in the Neuquen basin, Argentina, Petrolifera Petroleum Ltd.'s daily crude oil production is currently at 8,600 barrels per day (bbl/d) with a further volume of approximately 600 bbl/d shut in due to testing or workovers under way at five separate wells on the two blocks. Also, current natural gas sales are approximately 380 barrels of oil equivalent per day (boe/d), bringing the company's total production and productive capacity to approximately 9,625 boe/d.
Since the company's last update release in mid-August, 2007, the company has drilled, tested and completed four wells on the Puesto Morales block and two more wells on the Rinconada block. The best well on the Puesto Morales block was the 1044 well, which tested at an initial flow rate of approximately 2,000 bbl/d of light gravity crude and is currently on stream flowing at a rate of approximately 1,050 bbl/d. The 1033, 1042 and 1043 wells are also oil producers at current or anticipated rates of approximately 200 bbl/d, 475 bbl/d and 500 bbl/d, respectively.
Petrolifera has also drilled or is drilling additional wells, 1031, 1036 and 1037 at Puesto Morales. Two of these wells, 1036 and 1037, were originally scheduled as water injectors to be used in the company's planned waterflood on the northern lobe at Puesto Morales. However, the 1036 well encountered approximately nine metres of Sierras Blancas oil pay and, accordingly, will be tested and likely completed as an oil producer. A replacement injector will now be drill downdip from the 1036 well.
Recently, Petrolifera has had three rigs working at Puesto Morales. As was previously indicated, one of these rigs has now been released back to another operator active in the region. However, the Quintana rig No. 13, which arrived from China in the past while, has substantially been relocated to a staging area in Neuquen province and is expected to be available to Petrolifera before the end of September, 2007.
A new drilling rig and two service rigs (including the converted Quintana truck-mounted rig No. 3) are now operating on the Rinconada drilling program. In the past month, the 1006, 1029 and 1005 wells have all been drilled, logged and cased. Testing programs are planned or under way. The company continues to be enthused about the prospects at Rinconada, especially in light of the fact the 1029 well encountered oil and is situated about seven kilometres southeast of the initial discovery made at the Ra-1001 well, raising the possibility of considerable areal extent to the play. Further results will be released upon completion of testing programs. The next well to be drilled at Rinconada is 1011, situated approximately one-half mile south of the 1001 discovery well.
Construction and completion of the company's facilities at Puesto Morales are proceeding on schedule, despite some minor delays related to the shortage of natural gas to industrial companies during the winter months in Argentina. This slowed down the delivery of certain component parts for the high-pressure natural gas pipeline to Medanito, which is now expected to commence operations on Sept. 20, 2007, once low-pressure pipeline connections are completed. High-pressure connections and compression will now be operative around mid-November, 2007. Final completion of certain of the company's water treatment facilities and water injection scheme will also be delayed by several weeks for the same reason and are expected to be substantially operative by mid-October, 2007.
Elsewhere in Argentina, the company has been preawarded the Puesto Guevara concession by the government of the province of Rio Negro, Argentina. This block, which encompasses 171,520 acres (670 square kilometres), is on trend with and contiguous with the Vaca Mahuida concession southeast of the Rinconada block. Petrolifera was the sole bidder on this block at a recent Rio Negro sale of oil and natural gas rights. Upon formal award, Petrolifera as to a 100-per-cent working interest will be committed to reprocessing existing 3-D seismic coverage on the block, to shooting 100 square kilometres of new 3-D seismic and to the drilling of one 2,000-metre well within the first three years of the award date.
In Peru, the company's 2-D 800-kilometre seismic program on Ucayali block 107 is under way. The company is also evaluating various alternatives to secure a drilling rig or rigs for its proposed 2008 program on both its 100-per-cent-owned Ucayali block 107 and on the Maranon block 106.
In Colombia, formal awarding of the Sierra Nevada II TEA is anticipated in the next several days. In the interim, Petrolifera's technical staff is gathering and assessing all relevant data for the Sierra Nevada I licence and the Turpial TEA.
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