I did listen to the Scotia Capital presentation. It was short and a general overview of company operations. No new news, although the share price did run up after the presentation, so perhaps some good news was shared with the institution, and is on the way to us retail investors. Dana Coffield made a very clear presentation of the Peru properties block 122 and 128. Peru has some of the best netbacks in the world, and block 122 is highly speculative and extremely lucrative place to explore for oil.
Dana's point is that block 122 is on the crest of the ridge, and the crest has a natural migration path for billions of barrels of oil in "other" basins, (geologic models are Prudhoe Bay Alaska and heavy oil/oil sands Western Canada)where there has been billions of barrels of oil that's been produced from the surrounding valley (like the Maranon Basin) and may be billions of barrels along the Iquitos Arch play, is virgin, relatively unexplored. Block 122 is on the crest of the Arch, so this block is a excellent place to explore for "elephants". Archo de Iquitos is a heavy oil play. Dana used the term billions several times in reference to the Archo de Iquitos heavy oil targets (block 122 and 128).
The Iquitos Arch is a structural high (ridge) ie. the crest of a ridge play surrounded by prolific oil fields in valleys surrounding the Arch (ridge). You can tell Dana is excited about Peru, although drilling is not until 2010. Long term, Peru could be a real company maker, taking Gran Tierra to the next level. Some general discussion about Palmera #1 workover. Dana made it sound like the Rumiyaco KG, Caballos and Villeta formation were never tested. it was my understanding that the Caballos and Villeta were tested, and non-commercial and that only the Rumiyaco Kg formation was in play.
Dana also noted the new block Rumiyaco (formerly TEA block A) was on trend with the Costayaco oil field and that TEA block B would be converted to an exploration block soon.
Scott Price of Solana Resources, noted his company's estimate of the reserves in the Costayacos' Caballos are 30 - 40 million, plus the oil in the Villeta T and U formations, plus the oil in the Rumiyaco Kg. Dana was, as usual very cautious and did not provide any forward looking statements about Costayaco.
Dana also reinforced the integrety of Colombia's contract law and he had no concerns that Colombia's new tax would be retroactive. The new tax is proposed, and not approved for the upcoming round of 2008 oil and gas concessions in Colombia.
Some encouraging forward thoughts on Argentina from Pan Andina and Gran Tierra, ie Argentina will soon become a net importer of oil, due to the recent cap on oil prices $42. Both Pan Andina and Gran Tierra are of the opinion, that Argentina's price cap on oil is not sustainable long term, especially after Argentina begins to pay $127 for importing oil.
That's all from Dana. Here are my notes on the Arco De Iquitos prospect.
Arco De Iquitos (Arch Of Iquitos) crosses Peru blocks 122 and 128 and is part of the Amazonian basin which is in both Brazil and Peru. The Amazon Basin is (or is one of) the worlds largest fluvial basins encompassing several Cenozaic sub-basins which are delinated by geomorhological arches. The Arch of Iquitos is one of the arches of the Amazon basin, which passes thru Gran Tierra’s blocks 122 and 128. The town of Iquitos is located in block 122, along with a small oil facility. Much geological research has focused on the region surround Iquitos, search for Arco de Iquitos, as many of the reports are in pdf. Gran Tierra holds 3 million acres in the Iquitos region, and as you can see from Peru’s block map, the major oil companies have land on both sides of the Arco De Iquitos. ConocoPhillips to the south of Arco De Iquitos, and Petrobras to the north of the Arco De Iquitos. It looks to me the oil majors are speculating there’s oil on both sides of the Arch, Gran Tierra is playing the Arco De Iquitos from both sides of the fence, which is good.
The company’s Peru exploration acreage is very exciting. The company holds two blocks, Block 122 and Block 128, in an area selected specifically by the company which now has large international players such as ConocoPhillips, Petrobras, and Occidental in close proximity. Block 122 encompasses 1.2 million acres while Block 128 covers 2.2 million acres of land. The company has a 100% working interest in both blocks, which are on a regional structural high in the Maranon Basin. Both blocks are adjacent to proven petroleum deposits. The high structure point potential has acted as a regional focus point for petroleum migration from the basin, potentially resulting in very large oil accumulations. Analogous geologic models for large-size fields include Prudhoe Bay on the North Slope of Alaska as well as the heavy oil/oil sands in the Western Canadian Sedimentary Basin. The company is currently in the process of acquiring and interpreting aerogravity and magnetic data. Additionally, the company is planning a seismic program for 2008.
A competitor has targeted a billion barrels in two traps along the Iquitos Arch further north of blocks 122 and 128.
Cost effective drilling Iquitos arch Stratgraphic trap
Serpet Consult SA provided a report entitled "Cost effective exploration of a large stratigraphic trap on the Iquitos Arch" for block XIII, (north of block 122). The oil is heavy, and each of the traps - Arabela and Rumi Tumi are in the billion barrel range.
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