PELE Petrolatina

 

TIDMPELE 
 
RNS Number : 9882O 
Petrolatina Energy PLC 
17 March 2009 
 

17 March 2009 
PetroLatina Energy Plc 
("PetroLatina" or the "Company") 
 
 
Further Update re Colon-1 Exploration Well 
 
 
PetroLatina (AIM: PELE), an independent oil and gas exploration, development and 
production company focused on Latin America, is pleased to announce that the 
preliminary engineering analysis for its Colon-1 exploration well on the La 
Paloma block in the Middle Magdalena valley, Colombia has now been completed. 
The preliminary analysis indicates that this new field discovery has significant 
potential in terms of the expected production rate and the volumes of oil 
discovered. The Company retains an 80 per cent. working interest in the Colon-1 
well and is the operator. 
 
 
As announced on 18 February 2009, the Company discovered 22 degree API oil in a 
new reservoir, the Cretaceous Umir sand at the Colon-1 well. The Umir formation 
in the Middle Magdalena valley has not previously been tested in this area, and 
was encountered between 8,755ft and 8,795ft. The Colon-1 well flowed 
approximately 1,200 barrels of oil per day ('bopd') at a stabilised rate on a 
test extending over 99 hours. 
 
 
Petrophysical analysis of the well conducted by independent experts indicates 
that the porosity of the oil bearing reservoir is approximately 24 per cent. and 
that the oil saturation is approximately 72 per cent. The calculated pay in this 
zone is approximately 40ft of which 29ft was perforated for the tests conducted. 
The formation volume factor of this oil is approximately 1.08 standard cubic 
feet per stock tank barrel. 
 
 
Subsequent to the completion of flow testing the well was shut in for an 
extended buildup period of 5.8 days. The preliminary analysis of this data 
indicates that the zone is somewhat over-pressured with a reservoir pressure of 
approximately 6,200 pounds per square inch and that the calculated permeability 
is in the range of 60 to 80 millidarcies. The combination of over-pressure and 
modest permeability leads to a good production index of approximately 0.4 
barrels per day per pound of drawdown. This combination also appears to have 
allowed the well to clean up effectively as no skin damage was interpreted in 
the buildup analysis. These factors taken together suggest that the well is 
likely to produce at an initial rate near the test rate noted above of 1,200 
bopd. Based on the Colon-1 results obtained to date, PetroLatina believes that 
this well will result in a significant uplift to the Company's existing 
production, represents an important commercial oil discovery and is likely to 
lead to further success on the Company's Middle Magdalena acreage in due course. 
 
 
In order to predict the ultimate reservoir behavior the well will be placed on 
an extended production test for 180 days to assess the detailed sand quality, 
reservoir extent and potential recovery factors. All required documentation has 
been submitted to the local Ministry of Mines to enable this test to be 
permitted and the Company expects this permission to be granted. 
 
 
Temporary production facilities will be constructed and it is expected that the 
well will be placed on production in approximately 45 days from now. Oil 
produced to date and during the test period has, and will be, transported to the 
Ecopetrol sales point at Ayacucho approximately 150km from the Colon-1 well 
location. 
Re-mapping of the Colon-1 discovery is now in progress incorporating the new 
well results and aided by recently acquired high quality 3D seismic of the area. 
A preliminary estimate of the potential size of the Colon-1 discovery will be 
made when mapping has been completed. Mapping is also being carried out to 
define additional drilling locations on the La Paloma block to follow up the 
Colon discovery. 
 
 
The rig which drilled the Colon-1 well was subsequently moved to the Los 
Angeles-11 development well location, and has already reached the targeted total 
depth. Preliminary results for the Los Angeles-11 well are expected to be 
available shortly and will be announced in due course. 
 
Juan Carlos 
Rodriguez, CEO of PetroLatina, commented: 
 
 
"We are pleased to note that the results of the Colon-1 pressure build up test 
appear to confirm our earlier positive view regarding the potential impact of 
this well on PetroLatina's near term production rate. This drilling success will 
not only greatly supplement the Company's production volumes but will also allow 
for development of the La Paloma field which has several additional promising 
drilling locations. It will also result in an increase in the Company's reserves 
in due course. The proximity of this well to our existing and underutilised 
production facilities will allow us to monetize this discovery in the short 
term." 
 
 
Mr Menno Wiebe, a Non-executive director of the Company, has reviewed and 
approved the technical information contained within this announcement in his 
capacity as a qualified person, as required under the AIM rules. Mr Wiebe is a 
Petroleum Geologist and has been a Member of the American Association of 
Petroleum Geologists for more than 25 years and a Member of the Geological 
Society for more than 5 years. 
 
 
Enquiries: 
 
 
+-----------------------------------------------+---------------------------+ 
| PetroLatina Energy Plc                        | Tel: +57 1627 8435        | 
| Juan Carlos Rodriguez, Chief Executive        |                           | 
| Officer                                       |                           | 
+-----------------------------------------------+---------------------------+ 
| Pawan Sharma, Executive Vice President -      | Tel: +44 (0)207 956 2821  | 
| Corporate Affairs                             |                           | 
+-----------------------------------------------+---------------------------+ 
|                                               |                           | 
+-----------------------------------------------+---------------------------+ 
| Strand Partners Limited                       |                           | 
+-----------------------------------------------+---------------------------+ 
| Simon Raggett / Matthew Chandler              | Tel: +44 (0)20 7409 3494  | 
+-----------------------------------------------+---------------------------+ 
|                                               |                           | 
+-----------------------------------------------+---------------------------+ 
| Financial Dynamics                            |                           | 
+-----------------------------------------------+---------------------------+ 
| Ben Brewerton / Susan Quigley                 | Tel: +44 (0)20 7831 3113  | 
+-----------------------------------------------+---------------------------+ 
 
 
Additional Information on PetroLatina Energy Plc: 
PetroLatina Energy Plc (AIM: PELE), formerly known as Taghmen Energy Plc, was 
founded in 2004. The Company is presently focused on Colombia after the sale of 
its assets in Guatemala in which it retains a 20% interest in the first three 
wells and a 20% working interest in future wells. In Colombia, the Company 
currently holds 40% and 20% interests in the Los Angeles and Santa Lucía fields 
on the Tisquirama licence respectively, and a 100% interest in the Doña María 
field. In November 2007 the Company secured the extension of the Tisquirama 
licence for the economic life of the fields. In April 2006 the Group acquired an 
interest in two exploration blocks with an 85% interest in Midas and an 80% 
interest in La Paloma. PetroLatina also owns the Río Zulia-Ayacucho pipeline in 
the prolific Catatumbo basin which transports crude oil. Present 
exploration/exploitation activities in this area should increase the volume of 
crude oil transported resulting in an increased cash flow. Further information 
is available on the Company's website (www.petrolatinaenergy.com). 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 MSCJRMBTMMABBFL 
 

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