PetroMagdalena Provides Production and Exploration Update
06 February 2012 - 7:43PM
PR Newswire (Canada)
TORONTO, Feb. 7, 2012 /CNW/ - PetroMagdalena Energy Corp. , today
provided an update on its ongoing exploration program previously
announced on January 18, 2012, and provided a production update for
a new discovery on the Arrendajo block. Luciano Biondi, Chief
Executive Officer of the Company stated: "We continue to make
substantial progress with our first quarter exploration program.
The result from the discovery at Azor is very positive. The
incremental production we have from this well underpins our cash
flow and provides the financial support that will allow us to
expand our 2012 work program. The new Azor-1X well adds 587 bopd to
our gross working interest production. We have also made good
progress on our exploration program with intermediate casing set on
the Santa Cruz-1X well, logging and casing the Cernicalo-1ST well
and the Arrendajo Norte-1X well just south of the Azor discovery
will reach total depth by the end of the week. As previously
indicated, the first quarter incorporates intensive drilling
activity." PRODUCTION UPDATE Azor-1X production test The
Azor-1X well has been completed and was put on production on
January 31, 2012. The well produced at a stable rate of 1,181 bopd,
0.3% water cut and a well head flowing pressure of 270 psi, natural
flow with a 20/64th of an inch choke over the first 12 hours. The
choke was then changed to 16/64th of an inch and the well flowed at
a stable average rate of 870 bopd with a wellhead flowing pressure
of 290 psi of natural flow and a 0.3% water cut over a continuous
6-day period. This results in 587 bopd gross working interest
for the Company. The Azor-1X well was spudded on December 24, 2011
and discovered the Azor field on the Arrendajo Block, north of the
Cubiro Block in the Llanos Basin and on January 17, 2012,
PetroMagdalena initiated production testing on the C5 sand with the
announcement on January 18, 2012 that the zone was tested at 752
bopd of 35.5 degrees API oil with 1% -BS&W. The
final permit allowing for permanent production is currently in
process. The Azor field is located on the Arrendajo Block in the
Llanos Basin, where the Company has a 67.5% working interest,
subject to ANH approval. EXPLORATION UPDATE Arrendajo Block, Llanos
Basin: Arrendajo Norte - 1X Exploration well After drilling the
discovery well, Azor-1X, the drilling rig has moved to another
location on the Arrendajo block, Arrendajo Norte-1X, where the rig
spudded on January 28, 2012 and has completed drilling to 588 feet
(MD), after logging, the surface casing has been run and cemented.
It is anticipated that the well will reach the projected TD of 7022
feet (MD) by February 10, 2012 to test the Carbonera sequence that
was successful in the Azor-1X well, which is located 3 kilometers
to the north. Cubiro Block, Llanos Basin: Cernicalo - 1ST
Exploration well The Cernicalo-1ST well on the Cubiro Block has
been drilled to a TD of 6,792 feet (MD) and has completed electric
logs. Based on these results, 7-inch production casing has been run
in the well to total depth and plans are in place to complete and
production test the Guadalupe and C7 Carbonera Formations.
Results from the completion and testing program are expected before
the end of February 2012. PetroMagdalena has a 70% working interest
in the Cernicalo-1ST well and is the operator of the Cubiro Block.
Santa Cruz Block, Catatumbo Basin: Santa Cruz -1X Exploration well
After spudding the Santa Cruz-1X exploration well on November 20,
2011, intermediate casing of 9 5/8 inch was set at 9,533 ft MD and
drilling has progressed to 10,580 ft MD. It is expected the
well will reach TD before the end of February 2012. This well is
being drilled adjacent to the Rio Zulia field. For location details
on these wells, please refer to the Company's investor presentation
at www.petromagdalena.com. PetroMagdalena is a Canadian-based oil
and gas exploration and production company, with working interests
in 19 properties in five basins in Colombia. Further information
can be obtained by visiting our website at www.petromagdalena.com.
All monetary amounts in U.S. dollars unless otherwise stated. This
news release contains certain "forward-looking statements" and
"forward-looking information" under applicable Canadian securities
laws concerning the business, operations and financial performance
and condition of PetroMagdalena. Forward-looking statements and
forward-looking information include, but are not limited to,
statements with respect to estimated production and reserve life of
the various oil and gas projects of PetroMagdalena; the estimation
of oil and gas reserves; the realization of oil and gas reserve
estimates; the timing and amount of estimated future production;
costs of production; success of exploration activities; and
currency exchange rate fluctuations. Except for statements of
historical fact relating to the company, certain information
contained herein constitutes forward-looking statements.
Forward-looking statements are frequently characterized by words
such as "plan," "expect," "project," "intend," "believe,"
"anticipate", "estimate" and other similar words, or statements
that certain events or conditions "may" or "will" occur.
Forward-looking statements are based on the opinions and estimates
of management at the date the statements are made, and are based on
a number of assumptions and subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking statements. Many of these assumptions are based on
factors and events that are not within the control of
PetroMagdalena and there is no assurance they will prove to be
correct. Factors that could cause actual results to vary materially
from results anticipated by such forward-looking statements include
changes in market conditions, risks relating to international
operations, fluctuating oil and gas prices and currency exchange
rates, changes in project parameters, the possibility of project
cost overruns or unanticipated costs and expenses, labour disputes
and other risks of the oil and gas industry, failure of plant,
equipment or processes to operate as anticipated. Although
PetroMagdalena has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be
anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. PetroMagdalena undertakes no
obligation to update forward-looking statements if circumstances or
management's estimates or opinions should change except as required
by applicable securities laws. The reader is cautioned not to place
undue reliance on forward-looking statements. Statements concerning
oil and gas reserve estimates may also be deemed to constitute
forward-looking statements to the extent they involve estimates of
the oil and gas that will be encountered if the property is
developed. Boe may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an
energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. Estimated values of future net revenue disclosed do not
represent fair market value. Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release. Glossary
_____________________________________________________________________
|1P: Proven reserves |G&A: General and Administrative | |
|Expenses |
|_________________________________|___________________________________|
|2P: Proven + Probable reserves |MMCF: Million Cubic Feet |
|_________________________________|___________________________________|
|3P: Proven + Probable + Possible |MD: Measured Depth | |reserves |
|
|_________________________________|___________________________________|
|ANH: Agencia Nacional de |MMBBLS: Million Barrels of Oil |
|Hidrocarburos | |
|_________________________________|___________________________________|
|API: American Petroleum Institute|MMBTU: Millions British Thermal
| | |Unit |
|_________________________________|___________________________________|
|BOE: Barrels of Oil Equivalent | |
|_________________________________|___________________________________|
|BOFD: Barrels of Fluid Per Day |NPV: Net Present Value |
|_________________________________|___________________________________|
|BOPD: Barrels of Oil Per Day |PSI: Pounds per Square Inch. The | |
|unit of pressure. |
|_________________________________|___________________________________|
|BOEPD: Barrels of Oil Equivalent |TD: Total Depth of the well |
|Per Day | |
|_________________________________|___________________________________|
|BS&W: Basic Sediments and Water |TVD: True Vertical Depth of
the | | |well |
|_________________________________|___________________________________|
|E&PC: Exploration & Production |TVDSS: True Vertical Depth
Sub Sea | |Contract | |
|_________________________________|___________________________________|
|ESP: Electric Submersible Pump |WI: Working Interest |
|_________________________________|___________________________________|
|FOB: Freight on Board |WTI: West Texas Intermediate Oil | | |Price
Index |
|_________________________________|___________________________________|
PetroMagdalena Energy Corp. CONTACT: Michael
DaviesChief Financial Officer(416) 360-7915Belinda LabatteInvestor
Relations Representative(647) 436-2152
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