CALGARY, Sept. 12 /CNW/ - Petrolifera Petroleum Limited (PDP - TSX) announces that as a result of its recent and continuing drilling, completion and workover programs at Puesto Morales and Rinconada in the Neuquen Basin, Argentina, the company's daily crude oil production is currently at 8,600 bbl/d with a further volume of approximately 600 bbl/d shut in due to testing or workovers underway at five separate wells on the two blocks. Also, current natural gas sales are approximately 380 boe/d, bringing the company's total production and productive capacity to approximately 9,625 boe/d.
Since the company's last update release in mid-August 2007, the company has drilled, tested and completed four wells on the Puesto Morales Block and two more wells on the Rinconada Block. The best well on the Puesto Morales Block was the 1044 well, which tested at an initial flow rate of approximately 2,000 bbl/d of light gravity crude and is currently onstream, flowing at a rate of approximately 1,050 bbl/d. The 1033, 1042 and 1043 wells are also oil producers at current or anticipated rates of approximately 200 bbl/d, 475 bbl/d and 500 bbl/d, respectively.
Petrolifera has also drilled or is drilling additional wells, 1031, 1036 and 1037 at Puesto Morales. Two of these wells, 1036 and 1037, were originally scheduled as water injectors to be utilized in the company's planned waterflood on the northern lobe at Puesto Morales. However, the 1036 well encountered approximately nine meters of Sierras Blancas oil pay and accordingly will be tested and likely completed as an oil producer. A replacement injector will now be drill downdip from the 1036 well. The 1031 well is presently drilling. The company will shortly post an updated map of the region on its website at www.petrolifera.ca.
Recently, Petrolifera has had three rigs working at Puesto Morales. As was previously indicated, one of these rigs has now been released back to another operator active in the region. However, the Quintana Rig No. 13, which arrived from China in the past while, has substantially been relocated to a staging area in Neuquen Province and is expected to be available to Petrolifera before the end of September 2007.
A new drilling rig and two service rigs (including the converted Quintana truck-mounted Rig No. 3) are now operating on the Rinconada drilling program. In the past month, the 1006, 1029 and 1005 wells have all been drilled, logged and cased. Testing programs are planned or underway. The company continues to be enthused about the prospects at Rinconada, especially in light of the fact the 1029 well encountered oil and is situated some seven kilometers southeast of the initial discovery made at the Ra-1001 well, raising the possibility of considerable areal extent to the play. Further results will be released upon completion of testing programs. The next well to be drilled at Rinconada is 1011, situated approximately one-half mile south of the 1001 discovery well.
Construction and completion of the company's facilities at Puesto Morales is proceeding on schedule, despite some minor delays related to the shortage of natural gas to industrial companies during the winter months in Argentina. This slowed down the delivery of certain component parts for the high pressure natural gas pipeline to Medanito, which is now expected to commence operations on September 20, 2007 once low pressure pipeline connections are completed. High pressure connections and compression will now be operative around mid-November 2007. Final completion of certain of the company's water treatment facilities and water injection scheme will also be delayed by several weeks for the same reason and are expected to be substantially operative by mid-October 2007.
Elsewhere in Argentina, the company has been pre-awarded the Puesto Guevara Concession by the government of the Province of Rio Negro, Argentina. This block, which encompasses 171,520 acres (670 sq. kilometers), is on trend with and contiguous with the Vaca Mahuida Concession southeast of the Rinconada Block. Petrolifera was the sole bidder on this block at a recent Rio Negro sale of oil and natural gas rights. Upon formal award, Petrolifera as to a 100 percent working interest will be committed to reprocessing existing 3D seismic coverage on the block, to shooting 100 square kilometers of new 3D seismic, and to the drilling of one 2,000 meter well within the first three years of the award date.
In Peru, the company's 2D 800 kilometer seismic program on Ucayali Block 107 is underway. The company is also evaluating various alternatives to secure a drilling rig or rigs for its proposed 2008 program on both its 100 percent-owned Ucayali Block 107 and on the Maranon Block 106.
In Colombia, formal awarding of the Sierra Nevada II TEA is anticipated in the next several days. In the interim, Petrolifera's technical staff is gathering and assessing all relevant data for the Sierra Nevada I License and the Turpial TEA.
Petrolifera Petroleum Limited is a Calgary-based crude oil and natural gas exploration, development and production company. It is active in the Neuquen Basin, Argentina; in the Maranon and Ucayali Basins onshore Peru; and holds concessions onshore Colombia. The company's shares are listed for trading on the Toronto Stock Exchange under the symbol PDP.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements, including but not limited to future drilling plans, anticipated capital expenditures, forecast production, anticipated reserve additions and estimated flow rates and levels of water incursions. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production, delays or changes in 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 environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with foreign governments and 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 complete its capital program and potentially increase production volumes and reserves is dependent on access to services, drilling rigs and equipment. Similarly, the company's ability to increase sales of oil and natural gas is dependent on sustained productivity of new and existing wells, maintenance (or reduction) of water cuts and completion of certain infrastructure and transportation systems that are currently under construction. There can be no assurance that the flow rates of newly drilled wells will result in stabilized production at these levels or that the company's new or existing high productivity wells will not incur higher water cuts than that reported herein or reductions in reservoir pressures, resulting in a decision to further curtail production pending implementation of the proposed pressure maintenance program or other remedial measures. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in the company's securities should not place undue reliance on these forward-looking statements. Forward looking statements contained in this press release are made as of the date hereof and are subject to change. The company assumes no obligation to revise or update forward looking statements to reflect new circumstances, except as required by law.
A barrel of oil equivalent (boe), derived by converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil, may be misleading, particularly if used in isolation. A boe conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.