PELE Petrolatina

 

TIDMPELE 
 
RNS Number : 4871Q 
Petrolatina Energy PLC 
04 August 2010 
 

4 August 2010 
                             PetroLatina Energy Plc 
                        ("PetroLatina" or the "Company") 
 
                              Operational Update 
 
PetroLatina (AIM: PELE), the independent oil and gas exploration, development 
and production company focused on Latin America, is pleased to provide an 
operational update on developments at its La Paloma, Los Angeles and Santa Lucia 
fields. 
 
La Paloma Block 
 
Colon-1 and Colon-2 pump installation 
 
The installation of electrical submersible pumps ("ESPs") was completed in June 
2010 in both the Colon-1 and Colon-2 wells. The Colon-1 ESP is currently 
producing at a rate of approximately 320 barrels of oil per day ("bopd") gross 
at a low pump speed to prevent sand entry, and the Colon-2 ESP is producing at a 
rate of approximately 540 bopd gross also at a relatively low pumping rate. The 
installation of the ESP's has increased production of these two wells from 450 
to 860 bopd gross.  This ESP lifting system is currently being closely monitored 
and the speed of both pumps is gradually being increased in order to achieve 
anticipated production rates higher than the current levels. 
 
Colon-3 sidetrack development well 
 
The Colon-3 sidetrack well ("Colon-3 ST") was logged in early June 2010 and has 
now been completed. Initially, 78ft of the new channel sand found in the field 
which has been proven to be oil bearing will be tested. A new workover rig is 
currently being moved to the location to evaluate all production zones. 
Following this initial testing, other intervals will be perforated (around 26ft 
net pay) including the main reservoir sand of the field that has 10ft of pay 
between 9,144 to 9,154ft. 
 
The Company currently intends to present its commercial plan for the La Paloma 
field in October 2010 as soon as the environmental licence required for 
exploitation has been approved by the Agencia Nacional de Hidrocarburos and the 
extended testing completed. Once approved, the 24 year exploration licence term 
will commence. 
 
Engineering studies have commenced relating to the design and construction of 
production facilities capable of handling up to 6,000 bopd of oil, and 1.2 
MMSCFD of gas. Studies to determine the viability of power generation based on 
producing associated gas have begun, with the intention of reducing operating 
costs and improving stability in the availability of power for the field 
operation. 
 
Tisquirama Association Contract 
 
Querubin-1 exploratory well 
 
The Company's first well drilled outside of the commercial area of the Los 
Angeles field was successful. This represents a new discovery, and the 
importance of the Querubin-1 well lies in the fact that it has confirmed the 
economic viability of a large area of thick oil bearing pay which will, with 
future drilling, allow this pay to be reclassified as Proven reserves. 
Querubin-1 is near the 1985 Los Angeles-2 well which, although it found a 
similar thick oil bearing sand, proved to be non-economic due to problems 
relating to sand production which damaged the pumping equipment. The development 
of Progressive Cavity Pumps (PCPs) designed specifically to handle sand 
production since that time has provided a solution and allowed the economic 
production of these reserves in the Querubin-1 well. 
 
The main Lisama sand was perforated from 6,132ft to 6,335ft measured depth 
(203ft). The well is now being tested with a PCP and the well is expected to 
achieve a production rate of 250 bopd of 14  API oil, based on a good fluid 
level being observed at around 2,500ft. An extended test will be run for a 
period of 6 months. Production facilities with a capacity of handling up to 
1,500 bopd exist on site. 
 
Santa Lucia-5 
 
PetroLatina is pleased to announce that drilling of the Santa Lucia-5 well 
commenced on 29 July 2010. This well is a commitment well and is located in the 
south east part of the Santa Lucia field. The well is targeting a potentially 
oil bearing 30ft gross sandstone from the Eocene la Paz formation. It is planned 
to reach a total measured depth of 8,400ft. Drilling of this well will complete 
the Company's licence commitments and with the satisfaction of these obligations 
the drilling programs in which the Company pays a disproportionate share of the 
costs will come to an end and, in the future, PetroLatina will bear its working 
interest share of costs and receive the same share of production. 
 
New Workover and Well Service Rig 
 
The Company is, in conjunction with Ecopetrol S.A. and PetroSantander (Colombia) 
Inc., its partners in the Tisquarama licence area, in the process of acquiring a 
Workover and Well Service Rig. Ecopetrol S.A. and PetroSantander (Colombia) Inc. 
have both agreed to share their respective proportion of the acquisition and 
related costs of this rig, which will be operated by PetroLatina, and which will 
initially be used on the Tisquarama licence area.  Of a total cost of US$1.1 
million, PetroLatina will pay 37.5%, representing its share of the cost. 
 
Juan Carlos Rodriguez, Chief Executive of PetroLatina, said: 
 
"We are pleased with the developments at our La Paloma  Los Angeles and Santa 
Lucia fields; in particular we have successfully installed ESPs in our Colon-1 
and Colon-2 wells and commenced drilling operations on Santa Lucia-5 on 29 July, 
completing the Company's licence commitments. 
 
"Progress with the Colon wells continues, we anticipate presenting our 
commercial plan as early as October 2010, following approval of the 
environmental licence and completion of the extended test on the area. 
 
"Initial results on our new Querubin-1 exploratory well are also encouraging, 
the well is now being tested with a PCP and we look forward to reporting results 
of current testing in due course." 
 
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                        |                     | 
| Juan Carlos Rodriguez, Chief Executive        | Tel: +57 1627 8435  | 
| Officer                                       |                     | 
+-----------------------------------------------+---------------------+ 
| Pawan Sharma, Executive Vice President -      | Tel: +44 (0)20 7766 | 
| Corporate Affairs                             | 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. In June 2010, the Group was awarded two new 
blocks, the VMM28 in the Middle Magdalena basin and LLA57 in the Llanos basin. 
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 
 
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