TORONTO,
Feb. 7, 2012 /PRNewswire/ -
PetroMagdalena Energy Corp. (TSXV: PMD), 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 reserves |
MD: Measured Depth |
ANH: Agencia Nacional de Hidrocarburos |
MMBBLS: Million Barrels of Oil |
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 Per Day |
TD: Total Depth of the well |
BS&W: Basic Sediments and Water |
TVD: True Vertical Depth of the well |
E&PC: Exploration & Production
Contract |
TVDSS: True Vertical Depth Sub Sea |
ESP: Electric Submersible Pump |
WI: Working Interest |
FOB: Freight on Board |
WTI: West Texas Intermediate Oil Price Index |
SOURCE PetroMagdalena Energy Corp.