Development Plans Update (2926P)
October 03 2011 - 2:00AM
UK Regulatory
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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