Development Plans Update (5735R)

TIDMGED

RNS Number : 5735R

Global Energy Development PLC

07 November 2011

Immediate Release 7 November 2011

GLOBAL ENERGY DEVELOPMENT PLC

(the "Company")

PROGRESS ON TORCAZ CHOPS RECOMPLETION

AND TILODIRAN OPERATIONS

Global Energy Development PLC, the Latin America focused petroleum exploration and production company (AIM: GED), with operations in Colombia and Peru is pleased to announce the following update regarding the cold heavy oil production with sand ("CHOPS") recompletion of the Torcaz #5 well and the Tilodiran field operations.

REGIONAL STRATEGY REFOCUS - Middle Magdalena Valley

In light of recent technology advances in heavy oil production and fractured reservoir development, Global Energy Development is refocusing reserve exploitation to the Middle Magdalena valley. Over 88% of the Company's 2P oil reserves are located in the Bocachico and Bolivar Contract areas within the Middle Magdalena valley, and positive results are anticipated with the ongoing CHOPS project on the Torcaz #5 well within the Bocachico Contract area.

In previous years, the Company has accelerated the development of its oil reserves in the Llanos Basin of Colombia (Alcaravan, Rio Verde and the Canacabare / Los Hatos Contract areas) which has been the primary focus for the Company and its capital investment. Over 70% of Colombia's oil production comes from the Llanos Basin as Colombia's largest producing field (Rubiales) is located in the eastern Llanos Basin. This success has lead to pipeline access constraints in the area and consequently increased truck transportation costs. As such the Company will continue to maximise production in the Llanos Basin whilst optimising cost margins, which is evident at the Tilodiran field. Currently, approximately 95% of the Company's daily oil production comes out of the Llanos Basin, but only 6% of the Company's 2P oil reserves are located within these contract areas.

Steve Voss, Managing Director, commented "Colombia is enjoying the continued success and increase of its country-wide oil development and production. The strategic decision to refocus on the Middle Magdelena valley will help to optimise cost margins and exploit a larger proportion of the Company's 2P oil reserves."

BOCACHICO CONTRACT - Torcaz Field, Middle Magdalena Valley

CHOPS (Cold Heavy Oil Production with Sand) Project - Torcaz #5 well

The Company is moving forward with its plans to utilise one of the existing Torcaz wellbores, the Torcaz #5, for the initial CHOPS workover operation which targets the Lower Mugrosa formation. The Directors hope this plan will increase the Company's incremental production and allow for the further development of the Torcaz reserves at lower overall costs. Global engaged with skilled service and equipment providers with CHOPS experience and completed the planning and design of the operation, and a workover rig was mobilised in late October.

Operations have begun to remove the existing sand screens and clean out the well casing which could take approximately 14 to 20 days. The Torcaz #5 was originally drilled in 1999 and previously tested at sustained rates of 300+ barrels of oil per day through unscreened perforations before sanding up using conventional pumps. Sand screens were subsequently installed to control the sand influx. The previous unscreened flow behavior of Torcaz #5 has encouraged the company to use this wellbore as the first test of the CHOPS process in the Torcaz field.

Following completion of the well clean-out, the Company plans to utilise a total perforated section of 175 feet in the Lower Mugrosa formation and to install the abrasives tolerant PCP pump. Following installation of the pump (expected to be completed in December), the Company will test the well to analyse sand production to determine the final separation facility design. Expected capital costs of the recompletion project are approximately $1.5 million and will be funded out of cash from existing operations.

RIO VERDE CONTRACT - Tilodiran Wells, Llanos Basin

In order to minimise overall water production and improve cost margins at the Tilodiran field, the Company initiated a procedure on the Tilodiran 2 well to isolate and thereby reduce water production from the water-prone Ubaque formation and stimulate the Gacheta formation. Following the successful stimulation of the Gacheta formation in late October, the Tilodiran 2 well was placed on pump and is in the process of producing back imbibed Ubaque formation fluids and stimulation load fluids prior to the production of the Gacheta formation fluids. Following further testing and clean up, and when production resumes from the Gacheta formation only, the Company expects to recommence production from the Tilodiran 2 well with lower water levels and a targeted oil cut of approximately 350 gross bopd.

Secondly, the Company has its necessary environmental permits to convert the abandoned Rio Verde 2 well into water disposal service for the Tilodiran field and expects to proceed with the conversion in January 2012 pending certain final regulatory approvals. This project is expected to reduce water disposal costs per barrel of water from approximately $5.00 to approximately $1.00.

UPDATED INVESTOR PRESENTATION AVAILABLE ON WEBSITE

The Company is also pleased to announce it has updated its 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.

For further information please contact

Global Energy Development PLC

 
 Anna Williams, Director of Business 
   Development                           +001 817 310 0240 
  awilliams@globalenergyplc.com 
   www.globalenergyplc.com

Buchanan (Financial PR)

 
 Tim Thompson    +44 (0)20 7466 5000 
 Ben Romney 
 Helen Chan

Notes to Editors:

About CHOPS

CHOPS is a proven technique used by the Canadian oil industry of extracting heavy crude oil where sand production is encouraged as a means of enhancing well productivity using abrasives tolerant pumps. Using abrasives tolerant pumps, substantial production rate improvements over non-CHOPS techniques have been reported. The Company has 2P oil reserves of 75 million BOE (60% of Global's 2P reserve base) within the Bocachico Contract area as at 31 December 2010.

About Global Energy Development

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

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