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CALGARY, Dec. 29, 2014 /CNW/ - Petro-Victory Energy Corp.
("Petro-Victory" or the "Company") (TSX-V: VRY)
Highlights
- Test of Santa Rosa Formation confirms presence of hydrocarbon
accumulation plus associated condensate in the greater Lapacho
area
- Light oil/condensate encounter confirmed at the shallower Icla
Formation at Lapacho by logs and cores. However, a valid flow test
was not possible due to suspected bore hole annulus communications
with overlying Pirgua formation
Summary
As previously announced on the Press Release dated Dec. 10, 2014, the Lapacho well reached TD at
4,543m in the Santa Rosa Formation, the primary pre-drill target,
with 418m of the 600m target interval drilled. Hydrocarbon shows
have been encountered throughout the gross formation thickness
extending right to TD, with background gas of up to 20% and trip
gas of up to 48% (C1-C5 gas present). The full logging program was
restricted due to difficult downhole conditions. However, from the
logs obtained, Lapacho x-1 penetrated 54m of clean sandstones with
individual sand bed thicknesses up to 10m, most of which appear to
be hydrocarbon bearing. Additional sandstone, estimated from
seismic to be approximately 30m+, may exist in the undrilled target
interval section below current TD, which would result in a total
thickness of more than 80m of Santa Rosa reservoir sandstone at
this location.
Now, Petro-Victory's 2014 drilling campaign comes to an end
marking a major achievement, having demonstrated the presence of
previously unknown Paleozoic hydrocarbon bearing formations in the
Pirity Basin of the Paraguayan Chaco. This is a critical first step
in value creation for Petro-Victory's shareholders, for the
government of Paraguay and other
stakeholders.
Petro-Victory considers it has encountered hydrocarbons in two
separate reservoirs (Santa Rosa and Icla) which, when combined with
the source rock evidence at Jacaranda well, substantially de-risks
its Pirity Block asset.
The Icla hydrocarbon encounter, as defined by logs at Lapacho,
needs a definitive flow test to establish commerciality and
potential flow rates. However, there is an additional thickness of
Icla Formation in the Jacaranda prospect and management estimates a
thickness in excess of 50m for the Icla pay zones with important
Prospective Resources at a high chance of success.
In addition, Petro-Victory and Operator have previously
delineated a Cretaceous play fairway in the Pirity Concession as a
direct extension of the proved Palmar Largo oilfield trend in
adjacent Argentina, including the
drill-ready Tapir prospect. The Cretaceous play fairway in
Paraguay has been described in the
RPS Independent Audit Report of Prospective Resources initially
performed for Operator dated January
23rd, 2014, and then for Petro-Victory dated
May 19th, 2014.
"We are very proud of our 2014 drilling campaign. The giant
Lapacho structure has been shown by drilling and logging to contain
hydrocarbon bearing formations in both the Silurian Santa Rosa and
Devonian Icla Formations. I am confident that Petro-Victory has
established the presence of a large potential new resource base,
and by applying the increased learnings and understanding gained so
far, we will move forward to plan the 2015 drilling program to
unlock full block potential." (Richard F.
Gonzalez, Petro-Victory Energy Corp., CEO and Chairman)
Petro-Victory (36% WI) provides an update on testing of the
Silurian Santa Rosa and Devonian Icla reservoirs in the Lapacho
well. For the Santa Rosa, the difficult hole conditions experienced
during the drilling of the well had prevented a liner being run in
the 6" hole and an open hole test was performed. This was followed
by a cased hole test of the Icla.
The Santa Rosa Test
The test was conducted with the tubing tailpipe just inside the
7" casing at 4020m and drilling mud in the open hole (well TD at
4543m). The tubing was circulated to diesel to create the
underbalance and well was opened up. The well initiated flow at a
rate of 107 barrels per day but the test had to be prematurely
terminated after a cumulative production of only 14.2 barrels of
fluid returns due to a serious mechanical failure in the bottom of
the test string that prevented inflow.
After retrieving the test string and confirming the blockage, a
check trip was performed and elevated gas readings of greater than
20% total gas (including C1-C5) were encountered throughout the
cased and open hole sections until the bit held up due to hole
conditions. This demonstrates that the well flowed gas and
condensate, a view further reinforced by the significant gas shows
through the open hole drilling operations, as previously
announced.
Given the deteriorating hole conditions and high risk of hole
collapse under an extended testing program, it has been decided to
not attempt to repeat the test but to suspend the open hole section
for later re-drilling by side tracking, learning from the downhole
conditions experienced, and running a liner.
Management View of the Santa Rosa Test
In management's view the Lapacho x-1 drilling and test has
demonstrated the following with respect to the Santa Rosa
Formation:
- 58m of clean sandstones penetrated and based upon seismic,
significant additional sandstone, some 30m+, expected in the
undrilled target interval section below current TD, indicating a
total probable thickness of more than 80m at this location.
- The three way dip closure at Lapacho is part of a much larger
regional sub-crop trap, as described in the RPS Independent Audit
Report of Prospective Resources, initially performed for Operator
(dated 12th June 2014), and then
performed for Petro-Victory (dated July
28th, 2014). Assuming a total of 80m of
stacked sand pay zones and the figures in the RPS Independent Audit
Report, then the Lapacho three way dip closure contains gross
prospective resources of approximately 1 TCF gas plus associated
condensate. Lapacho x-1 well has therefore confirmed the presence
of a very significant accumulation of hydrocarbons plus associated
condensate in the greater Lapacho area.
The Icla Test
The test was performed over the two oil bearing sands at
3926-3953m as previously announced on the Press Release dated
October 20th, 2014. The
operation was carried out using a Schlumberger drill stem test
string and underbalanced 4.5" TCP perforation guns. During two flow
periods a total of 110 barrels of gas cut formation water with
average salinity of 80,000ppm with no traces of oil were obtained.
The water salinity is characteristic of the overlying Cretaceous
Pirgua Formation above 3,915m and not characteristic of the lower
salinity Icla Formation (35,000-50,000ppm).
Management View of the Icla Test
The Icla test is not a valid test of the Devonian hydrocarbon
bearing interval, previously evaluated using a full suite of
wireline logs, complemented by hydrocarbon bleeding side wall
cores. The cementation of the 7" liner was executed successfully
but the cement bond log (CBL-VDL) shows poor quality cement over
the Cretaceous Pirgua Formation which immediately overlies the Icla
Formation. Although the cement bond log shows good cement over the
Icla perforation interval, it is concluded that communication
exists with the overlying highly permeable Cretaceous Pirgua sands.
Given the cost of mobilizing equipment for a squeeze job and
generally low chance of success of these operations, the interval
was suspended for a future re-entry.
Lapacho x-1 drilling and logging has demonstrated the following
with respect to the Icla Formation:
- Combined net sand thickness of 20m, with an average porosity of
6% and 60% oil saturation (using a water salinity of
50,000ppm).
- Logging shows the extensive development of conductive natural
fractures. Side wall cores were bleeding live oil and hydrocarbon
type appears to be light oil and condensate.
Next Steps
Given the resource potential at the Pirity Block, management
will engage in discussions with potential strategic industry
partners, to unlock the full value of our asset. The QG1 rig will
be released with a view to resume the drilling program on high
graded prospects in the summer of 2015.
The 2014 drilling campaign has drilled two wells which have
demonstrated the presence of a new Paleozoic hydrocarbon province
in the Pirity Basin of the Paraguayan Chaco. The Company is a
non-operating partner in the two million acre Pirity Block.
Petro-Victory Energy Corp. is a publicly held British Virgin Islands oil and gas exploration
company focused on Latin America
with administrative headquarters based in Fort Worth, Texas, United States.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
these securities, in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction.
The securities have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws and may not be
offered or sold within the United
States unless an exemption from such registration is
available.
Cautionary Note
Neither the 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 release.
Advisory Regarding Forward-Looking Statements
In the interest of providing Petro-Victory's shareholders and
potential investors with information regarding Petro-Victory,
including management's assessment of Petro-Victory's future plans
and operations, certain statements in this press release are
"forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and
"forward-looking information" within the meaning of applicable
Canadian securities legislation (collectively, "forward-looking
statements"). In some cases, forward-looking statements can be
identified by terminology such as "anticipate", "believe",
"continue", "could", "estimate", "expect", "forecast", "intend",
"may", "objective", "ongoing", "outlook", "potential", "project",
"plan", "should", "target", "would", "will" or similar words
suggesting future outcomes, events or performance. The
forward-looking statements contained in this press release speak
only as of the date thereof and are expressly qualified by this
cautionary statement.
Specifically, this press release contains forward-looking
statements relating to but not limited to: our business strategies,
plans and objectives, and drilling, testing and exploration
expectations. These forward-looking statements are based on certain
key assumptions regarding, among other things: our ability to add
production and reserves through our exploration activities; the
receipt, in a timely manner, of regulatory and other required
approvals for our operating activities; the availability and cost
of labour and other industry services; the continuance of existing
and, in certain circumstances, proposed tax and royalty regimes;
and current industry conditions, laws and regulations continuing in
effect (or, where changes are proposed, such changes being adopted
as anticipated). Readers are cautioned that such assumptions,
although considered reasonable by Petro-Victory at the time of
preparation, may prove to be incorrect.
Actual results achieved will vary from the information provided
herein as a result of numerous known and unknown risks and
uncertainties and other factors. These and additional risk factors
are discussed in our Final Prospectus dated July 11, 2014, as filed with Canadian securities
regulatory authorities at www.sedar.com.
The above summary of assumptions and risks related to
forward-looking statements in this press release has been provided
in order to provide shareholders and potential investors with a
more complete perspective on Petro-Victory's current and future
operations and such information may not be appropriate for other
purposes. There is no representation by Petro-Victory that actual
results achieved will be the same in whole or in part as those
referenced in the forward-looking statements and Petro-Victory does
not undertake any obligation to update publicly or to revise any of
the included forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
by applicable securities law.
SOURCE Petro-Victory Energy Corp.