CALGARY, Jan. 15 /CNW/ - Petrolifera Petroleum Limited (PDP - TSX) confirmed today that its waterflood pressure maintenance project at Puesto Morales North in the Neuquen Basin, Rio Negro Province, onshore Argentina commenced continuous operations on January 11, 2008, following a period of commissioning and line testing which started in late December, 2007.
The purpose of the project is to enhance reservoir pressure in the prolific and high quality Jurassic Sierras Blancas oil-bearing reservoir at Puesto Morales. It is anticipated that there will be a period of approximately six months of water injection before meaningful response will be discernible in overall crude oil production levels and that it will take approximately eighteen months from startup of injection to achieve optimum production response, based on initial simulation studies of the reservoir. The high quality reservoir, characterized by excellent porosities and significant measured permeability, should facilitate excellent transmissibility of fluid and the project is expected to have a material and favorable impact on the ultimate recovery factor for the field.
The first injection stage in the Sierras Blancas formation will occur in 2008 and is expected to reach a total water injection rate of 18,000 barrels of water per day with approximately thirteen injector wells, including new wells and conversions. Future waterflood developments and optimizations will increase the injection rate to the capacity of 25,000 barrels of water per day.
The water injection plant is now operating with initial injection of approximately 5,000 barrels of water per day in four wells, PMN-1025, PMN-1011 and PMN-1037 in the northern part of the field and PMN-1035 in the central portion of the field. Over time, additional injectors will be tied back to the plant to realize the final injection rate of approximately 25,000 barrels of water per day. Fresh water is supplied to Petrolifera's water treatment plant, situated in the northern portion of the field, through a six kilometer ten-inch pipeline from facilities situated near the Casa de Piedra dam on the Rio Colorado River, resulting in the reservoir or embalse in the region.
Petrolifera's Puesto Morales water treatment plant filters the water with a targeted efficiency exceeding 90 percent on particle sizes exceeding five microns. Also, a target of 90 percent efficiency in oxygen removal is anticipated.
The activation of the water injection plant is a significant milestone for Petrolifera. It was constructed against a backdrop of energy and equipment shortages in Argentina and its completion is a credit to the company's operational staff and external advisors and consultants. More importantly, it is anticipated the waterflood will consequentially impact on Petrolifera's light crude oil production in Argentina during 2008 and beyond.
Petrolifera is a Calgary-based crude oil and natural gas exploration, development and production company with activities in Argentina, Peru and Colombia. The company has branch offices in Buenos Aires, Argentina; Bogota, Colombia and Lima, Peru. Its common shares are listed for trading on the Toronto Stock Exchange under the symbol PDP. There are presently 50.1 million common shares outstanding (54.4 million fully-diluted). The company's growth from a modest startup base in late 2005 when it went public has been organic, through successful drilling programs in Argentina. Since that time the company has expanded into both Colombia and Peru, and controls approximately 6.5 million net acres of exploration and production rights in these three South American countries. Petrolifera operates with a very small head office staff of three full-time professionals, two part-time individuals and solely employs nationals in all of its foreign offices. The company prides itself on its efficiency of operations, low finding and development and on stream costs, low operating costs and its efficient use of capital.
Forward-Looking Information
This press release contains forward-looking information, included but not limited to anticipated results of Petrolifera's waterflood pressure maintenance project and its potential impact on future production levels. This forward looking information is not based on historical facts but rather on Management's expectations regarding the performance of the waterflood plant and facilities and reservoir characteristics. Such forward looking information reflects Management's current beliefs and assumptions and is based on information currently available to Management. Forward looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward looking information, including but not limited to, risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production, delays or changes to plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environment risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with foreign governments and third parties located in foreign jurisdictions and the risk associated with international activity. Additional risks and uncertainties are described in the company's Annual Information Form which is filed on SEDAR at www.sedar.com. The company's ability to increase sales of crude oil and natural gas is dependent upon sustained productivity of new and existing wells and results of its water flood and water injection program. Although the forward looking information contained herein is based upon assumptions which Management believes to be reasonable, the company cannot assure investors that actual results will be consistent with this forward looking information. This forward looking information is made as of the date hereof and the company assumes no obligation to update or revise this information to reflect new events or circumstances, except as required by law. Because of the risks, uncertainties and assumptions inherent in forward looking information, prospective investors in the company's securities should not place undue reliance on this forward looking information.