Development Plans Update (2926P)

TIDMGED

RNS Number : 2926P

Global Energy Development PLC

03 October 2011

Immediate Release 3 October 2011

GLOBAL ENERGY DEVELOPMENT PLC

(the "Company")

DEVELOPMENT PLANS UPDATE

Global Energy Development PLC, the Latin America focused petroleum exploration and production company (LSE-AIM: "GED"), with operations in Colombia and Peru is pleased to announce the following update regarding its activities and plans for operations. These areas of development will be the primary focus of the Company over the next six months and are budgeted from operating cash flows and available cash on hand.

RIO VERDE CONTRACT - Tilodiran Wells, Llanos Basin

Following the positive results of increased crude oil production capabilities from the Tilodiran workover programme, water disposal costs per barrel at the Tilodiran field increased by over 50%, primarily from the Tilodiran 2 well, due to the loss of a third party water disposal vendor. In August 2011, the Company elected to temporarily suspend production from the Tilodiran 2 well in order to determine a more cost efficient water disposal alternative.

The Company is pursuing a two-fold course for minimising overall water production and reducing the costs associated with the disposal of the produced water in the Tilodiran field. First, the Company is planning an operation to reduce a substantial part of the water production in the Tilodiran 2 well by isolating and thereby reducing production from the water-prone Ubaque formation and stimulating the Gacheta formation further. The Company expects to recommence production from the Tilodiran 2 well with lower water levels and a targeted oil cut of approximately 350 gross barrels of oil per day ("BOPD"). Secondly, the Company is planning to convert the abandoned Rio Verde 2 well into a water disposal well. Once the required permits are received, this project is expected to provide a more cost efficient alternative for disposition of water from the Tilodiran field.

BOCACHICO CONTRACT - Torcaz Field, Magdalena Valley

The Company is working with an experienced oilfield service company to utilise the "CHOPS" technology (Cold Heavy Oil Production with Sand), recently developed, applied and proven by the Canadian oil industry, for the production of the heavy oil sands within the Torcaz field. The CHOPS technology addresses the unique problems associated with the Torcaz formation and is well suited for heavy oil fields that produce sand. Using abrasives-tolerant pumps, substantial production rate improvements have been reported by Canadian operators with this technology. Based on recent well logs, certain sand formations in the Torcaz field have potential pay zones of approximately 200 feet of net oil pay and are saturated with heavy oil ranging from 12 degrees to 16 degrees API. The Company plans to utilise one of the existing Torcaz wellbores for the initial CHOPS workover operation targeting the Upper Mugrosa formation to increase the Company's incremental production and to allow for the further development of the Torcaz reserves at lower overall costs.

BOLIVAR CONTRACT - Bolivar Field, Magdalena Valley

After researching and evaluating detailed seismic, cuttings, cores and formation images within the Bolivar Block of the Middle Magdalena Basin, the Company believes the oil shale formations within this area hold comparable petrophysical properties to those within North American shale formations. The Company is targeting a shale test in the Simiti formation. The Company anticipates the expected oil production may easily be transported to market given the proximity to major pipeline systems and receiving stations. The Company is in negotiations with experienced North American oilfield service companies to assist in the completion of design and coordination of the project.

The preliminary near term project objective is to re-enter the existing Catalina #1 wellbore and test the Simiti Shale for producible gas, condensate and gas liquids (with a gravity likely to exceed 35 degrees API). The Simiti will be hydraulically fractured according to a design comparable to current industry shale fracturing technique best practices. This will be the first shale test in Colombia.

PERU BLOCK 95 AREA LICENCE CONTRACT (Block 95 Contract)

The official assignment process of the Block 95 Contract to Gran Tierra Energy ("GTE") (NYSE Amex: GTE) (TSX: GTE), a company focused on oil and gas exploration and production in South America, is progressing following the earlier approval by Perupetro of GTE's qualification as Operator (a prerequisite for the assignment process). Perupetro subsequently sent its approval to the other required governmental agencies (or ministries) for their respective approval in April 2011. The ministries are continuing to review and their final approval is pending before the required Supreme Decree authorising the assignment can be executed by the President of Peru. In the interim, as previously announced, GTE has identified a drilling site location for the first exploration well on Block 95 and expects civil construction to begin late in the fourth quarter of 2011. Drilling is expected to begin in second quarter of 2012.

INVESTOR PRESENTATION AVAILABLE ON WEBSITE

The Company is also pleased to announce it has updated a presentation to its investors regarding the Company and its operations. The shareholder presentation is now available to view on the Company's website at www.globalenergyplc.com.

Steve Voss, Managing Director, commented "While the Company is focused on maximising near-term production, we want to balance the desire for increased sales volumes with bringing those volumes to market at the highest possible cash netback margins. Spending time and capital dollars to improve the water disposal issue at the Tilodiran field in the short-term will produce higher margins for the Company and its shareholders in the long-term. We are also excited about moving our development focus to the Magdalena Valley. Producing and transporting oil from of the Magdalena Valley eliminates the high transportation costs and pipeline restrictions that we are currently experiencing in the Llanos Basin. We expect to realise savings of over $15.00 per barrel in transportation costs moving crude from the Magdalena Valley as compared to our Rio Verde production. The CHOPS workover operation at Torcaz and the Simiti Shale project at Bolivar both are expected to further define our reserves in these fields as well as add incremental production."

Global Energy Development PLC

 
 Anna Williams, Director of 
   Business Development         +001 817 773 1502 
  awilliams@globalenergyplc. 
   com 
   www.globalenergyplc.com

Buchanan Communications

 
 Tim Thompson    +44 (0)20 7466 5126 
 Ben Romney      +44 (0)20 7466 5132

Notes to Editors:

The Company's shares have been traded on AIM, a market operated by the London Stock Exchange, since March 2002 (AIM: GED). The Company's balanced portfolio includes the countries of Colombia and Peru and comprises a base of production, developmental drilling and workover opportunities and several exploration projects. The Company currently holds six contracts: five in Colombia and one in Peru.

The information contained within this announcement has been reviewed by Mr. Stephen Voss, a Director of the Company, for the purpose of the Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in respect of AIM companies which outlines standards of disclosure for natural resource projects. Mr. Voss is a Registered Professional Engineer in Texas and has been a Member of SPE for 27 years.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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