PELE Petrolatina

 

TIDMPELE 
 
RNS Number : 1986Z 
Petrolatina Energy PLC 
16 September 2009 
 

16 September 2009 
 
PetroLatina Energy Plc 
("PetroLatina" or the "Company") 
 
 
Colon-2 Development Well Update 
 
 
Colon-2 development well flows oil at a substantial rate and confirms that the 
Colon discovery has considerable potential 
 
 
PetroLatina (AIM: PELE), an independent oil and gas exploration, development and 
production company focused on Latin America, announces that the Colon-2 well, on 
the La Paloma block, is now on test and is currently flowing oil at a 
substantial rate. 
 
 
Highlight: 
 
  *  The Colon-2 development well has been placed on a production test and is 
  producing oil at an average rate of 664 barrels of oil per day ("bopd") on a 
  restricted choke over the first three days of testing. 
 
 
 
Juan Carlos Rodriguez, Chief Executive of PetroLatina, commented: 
"The success of PetroLatina's Colon-2 development well is most encouraging in 
that it not only provides the Company with increased short term cash flow, but 
also sets the stage for a full scale development of the Colon field discovery." 
 
 
 
 
Colon-2 - La Paloma Block 
 
 
As previously announced, the Colon-2 well, the first appraisal well to be 
drilled following the Colon-1 discovery earlier this year, and located about 
0.25 miles (450 metres) north of that well, has been successfully drilled to a 
total measured depth of 9,300ft, logged, cased and cemented. Colon-2 found the 
same oil bearing pay zone as that found to be oil productive in Colon-1, only 
12ft structurally lower to that well. This was somewhat higher than the pre 
drill estimate and essentially serves to confirm the field maps and provide for 
a slightly more optimistic interpretation of oil in place than in the past. 
Those field maps, based on the high quality 2008 3D seismic survey, are 
therefore considered to be reliable. 
 
 
The net oil pay thickness in the primary target in Colon-2 was essentially the 
same as in Colon-1 confirming that this reservoir has considerable potential. In 
addition to the specific Umir pay sand discussed above, the Colon-2 well found 
and tested oil from additional pay in a sand 300ft deeper than that which 
produced oil in Colon-1. Colon-2 also encountered oil pay, based on log 
interpretation, in an Upper Umir sand, also believed to be oil bearing but not 
tested in Colon-1. 
 
 
The main Umir sand pay zone was cored throughout and the core is currently being 
analysed to provide accurate porosity and permeability data for reservoir 
modeling purposes and the recalculation of reserve volumetrics. 
 
 
The primary target Umir sand in Colon-2, as well as the deeper sand noted above, 
were perforated over the interval 8,774 to 8,812ft (38ft net) and 9,015 to 
9,032ft (17ft net) respectively and testing of the well commenced on 8 September 
2009. The well was flowed at an average rate of 664 bopd through a restricted 
choke between 8 to 16/64th over the initial three days of testing. Essentially 
no water was being produced at the end of this period confirming that both of 
the two zones under test are oil bearing. The flow rate and flowing pressures 
were stable at the end of the test period and the well continues to flow and the 
cumulative production to 14 September 2009 was 3,138 barrels of oil. 
 
 
The oil produced from Colon-2 is being trucked to the Ecopetrol S.A. receiving 
station at Ayacucho and sold under the same terms as those which apply to the 
Colon-1 oil production. 
 
 
The Colon-2 well was drilled on the La Paloma Block in which the Company holds 
an 80% interest. This block is held under the same attractive terms from the 
Agencia Nacional de Hidrocarburos ("ANH") as those outlined previously for the 
Midas block whereby the royalty is 8%, no "high price" or "windfall profits" 
formula applies until 5 million barrels have been produced and there is no state 
back in right. As such, each barrel of oil produced in this block is 
approximately three times as valuable to the Company, in terms of net cash flow, 
as a barrel produced from one of the Company's traditional fields such as Los 
Angeles. 
 
 
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 - Corporate    | Tel: +44 (0)207 766    | 
| Affairs                                               | 0075                   | 
+-------------------------------------------------------+------------------------+ 
|                                                       |                        | 
+-------------------------------------------------------+------------------------+ 
| 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 45% 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 
 
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