PELE Petrolatina

 

TIDMPELE 
 
RNS Number : 1382N 
Petrolatina Energy PLC 
07 June 2010 
 

EMBARGOED FOR RELEASE AT 7AM 
7 June 2010 
                            PetroLatina Energy Plc 
                        ("PetroLatina" or the "Company") 
 
                           Update re La Paloma field 
 
         Colon-3 well drilled and Colon-1 and Colon-2 pump installation 
 
PetroLatina (AIM: PELE), the independent oil and gas exploration, development 
and production company focused on Latin America, announces an update on its 
Colon-3 development well and the installation of electrical submersible pumps in 
the Colon-1 and Colon-2 production wells on the La Paloma field. 
 
The installation of electrical submersible pumps ("ESPs") has recently been 
completed in both Colon-1 and Colon-2. These wells had previously been on 
natural flow at a total combined gross production rate of approximately 500 
barrels of oil per day ("bopd") (425 bopd net). The Colon-2 ESP has been on 
production for one week at a rate of approximately 515 bopd gross with 
essentially no water at a relatively low pumping rate. That rate will be 
increased gradually to avoid sand problems and a production rate of 600 bopd 
gross is anticipated. The Colon-1 ESP has also been installed in the past few 
days and is currently producing approximately 320 bopd at a low pump speed to 
prevent sand entry. The rate of production for this well is also expected to 
reach 600 bopd gross when the pump rate has been optimised. The total gross La 
Paloma field production rate from the current two wells is, in summary, expected 
to increase from the current rate of 500 bopd to 1,200 bopd as a result of the 
installation of the ESP's. This increase of 700 bopd gross will result in a net 
rate to PetroLatina of 546 bopd. 
 
The Colon-3 development well was drilled to a final total measured depth of 
9,433 feet at a location 1.0 km south of the producing Colon-1 discovery well. 
The Colon-3 well was logged, cased and cemented. Petrophysical evaluation 
indicates that the well found the same oil bearing sand, currently productive in 
the Colon-1 and Colon-2 wells, approximately 185 feet structurally lower to 
Colon-1 as expected and apparently oil bearing but thinner than in the previous 
wells. That is a positive result from a reserves perspective in that the data 
strongly suggests that the oil extends considerably deeper than that seen in the 
previous wells and further downdip than that assumed in the Proven and Probable 
cases in the recently released Ryder Scott Company L.P. report. 
 
At the same time, the fact that the sand has thinned from the 25 to 30 feet of 
net pay found in Colon-1 and Colon-2 to 8 feet in Colon-3 suggests that the 
reservoir thins and then potentially pinches out to the south. Such a pinch out 
could create a hydrocarbon trap to the south, which was previously thought to be 
open and form a structural spill point for migrating hydrocarbons. Such a 
southern trap could support larger than expected reserves to the north, east and 
west where the productive sands are mapped to be within structural closure based 
on the 2008 3D seismic survey data. The relatively thin sands at Colon-3 
however, despite their probable oil content, are thought to be unlikely to 
support the high sustained production rates seen in Colon-1 and Colon-2. That 
consideration together with mechanical problems experienced in the well 
subsequent to running casing and cementing, has lead to a decision to sidetrack 
the well to a location about 400 metres south of the producing Colon-1 well. 
Amplitude analysis of the 3D seismic data indicates that the sidetrack location 
is likely to lead to sands similar in thickness and quality to those found in 
Colon-1 and accordingly a high rate productive well. 
 
In addition to the main producing sand outlined above, the Colon-3 well found, 
an interpreted oil bearing sand with 12 feet of net oil pay some 200 feet above 
the main sand. Furthermore, two thinner interpreted oil bearing sands (8 ft 
each), were found below the main oil pay zone. These will be further evaluated 
in the planned sidetrack which is expected to take approximately 3 weeks to 
complete.  The completion and testing of the Colon 3 sidetrack combined with the 
integration of the Colon 3 data into the geological model will allow the Company 
to remap the Colon field and provide an updated reserves assessment. That 
project is expected to be completed within 90 days. 
 
The Querubin-1 well, which is located within the mapped Los Angeles field, was 
spudded on 28 May 2010 and is currently at 1,244 feet where casing is being set. 
This well is located near the Los Angeles-2 well which produced oil from the 
Lower Lisama formation, the primary producer in the Los Angeles field, from 
March 1984 to June 1987. The Los Angeles-2 well produced 22,064 barrels of 19 to 
21 degree API oil and was eventually shut in due to sand production problems, 
however it is expected that modern completion methods will resolve that problem. 
The Lower Lisama target sand is thick (greater than 300 feet) in this area and 
occurs at approximately 5,900 feet which is approximately 1,500 feet updip of 
the same sand in the area of current production in the field. The Company 
operates and holds a 50% interest in this area subject the right of Ecopetrol to 
back in for half of that interest by paying its share of the well cost. 
 
The Company will give a further update on this well and the Colon-3 sidetrack in 
due course. 
 
Juan Carlos Rodriguez, Chief Executive of PetroLatina, said: 
 
"The significant production uplift expected from the Colon / La Paloma field 
following the installation of the electrical submersible pumps is a pleasing 
result.  The Colon-3 well, although experiencing thinner sands and mechanical 
problems, has provided much valuable information suggesting that the oil extends 
considerably deeper and further downdip than assumed in the recent Ryder Scott 
reserves report.  The planned sidetrack operation should enable sands of similar 
thickness and quality to those found in Colon-1 to be encountered and ultimately 
a high rate productive well." 
 
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)20     | 
| Corporate Affairs                             | 7766 0081          | 
+-----------------------------------------------+--------------------+ 
|                                               |                    | 
+-----------------------------------------------+--------------------+ 
| Strand Hanson Limited                         |                    | 
+-----------------------------------------------+--------------------+ 
| Simon Raggett / Matthew Chandler              | Tel: +44 (0)20     | 
|                                               | 7409 3494          | 
+-----------------------------------------------+--------------------+ 
|                                               |                    | 
+-----------------------------------------------+--------------------+ 
| Evolution Securities Limited                  |                    | 
+-----------------------------------------------+--------------------+ 
| Rob Collins / Chris Sim                       | Tel: +44 (0)20     | 
|                                               | 7071 4304          | 
+-----------------------------------------------+--------------------+ 
|                                               |                    | 
+-----------------------------------------------+--------------------+ 
| Financial Dynamics                            |                    | 
+-----------------------------------------------+--------------------+ 
| Ben Brewerton / Susan Quigley                 | Tel: +44 (0)20     | 
|                                               | 7831 3113          | 
+-----------------------------------------------+--------------------+ 
 
Additional Information on PetroLatina Energy Plc: 
PetroLatina Energy Plc (AIM: PELE) is presently focused on Colombia where it 
currently holds 45% and 20% interests respectively in the Los Angeles and Santa 
Lucía fields on the Tisquirama licence, and a 100% interest in the Doña María 
field. In April 2006 the Group acquired an interest in two exploration blocks: 
an 85% interest in Midas and an 80% interest in La Paloma. In November 2007 the 
Company secured the extension of the Tisquirama licence for the economic life of 
the fields. In February 2009, the Group acquired the Putumayo-4 block in which 
it has a retained 50% interest. 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. Having sold its 
assets in Guatemala, PetroLatina retains a 20% interest in the first three wells 
and a 20% working interest in future wells. 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 
 
 MSCSSAFAMFSSELM 
 

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