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Colombia's state-controlled energy firm Ecopetrol SA (EC, ECOPETROL.BO, ECP.T) said Tuesday an exploratory well in the central state of Meta has yielded oil that, while small in initial size, helps prove the area's potential.
The oil was found at the Fauna-1 well, making it the latest of four wells in the Cano Sur block in Colombia's Llanos Orientales, or Eastern Plains, that have been said to be successful.
After drilling 3,300 feet below the surface at the Fauna-1 well, Ecopetrol said it found heavy crude flowing at a rate of about 132 barrels per day. "In initial tests the well produced 695 barrels," it said in a statement
Ecopetrol is the owner and operator of the Cano Sur block, a 611,000-hectare (1.5 million acre) area considered one of the company's best new prospect regions as it seeks to continue increasing production.
"The company believes the results obtained from this block and from others in the area confirm the importance of the Llanos Orientales for Ecopetrol's growth strategy, and for achieving the goals proposed by the company in the coming years, which include reaching one million barrels in equivalent [daily] production in 2015," Ecopetrol said in the statement.
Last week, the company said it was producing a record 753,000 barrels of oil equivalent per day as of late June, up from a 610,000 barrel-a-day average in 2010.
In addition to new finds, the company expects to raise output by improving the extraction rates at existing fields and from the 51% stake in the Colombian operations of BP PLC (BP, BP.LN) that Ecopetrol and Canadian oil company Talisman Energy Inc. (TLM, TLM.T) purchased recently.
Still, analysts have questioned whether Ecopetrol's 1-million-barrel-a-day target can realistically be reached without some giant new discovery.
"There is still an aching suspicion locally that they need to hit an elephant discovery (or 2) in order to make that [1 million barrel a day] target," Celfin Capital analysts in Medellin said last week.
Ecopetrol is involved in production and exploration projects in the U.S. Gulf Coast, Brazil and Peru, where in 2010 it was awarded the rights to several exploration blocks. The company has earmarked $8.5 billion in capital investment for 2011.
-By Dan Molinski, Dow Jones Newswires; 57-310-867-6542; email@example.com