CALGARY, May 15 /CNW/ - Solana Resources Limited (TSX-V: SOR; AIM: SORL) is pleased to announce that the Costayaco-1 wildcat exploration well has been successfully drilled, logged and cased as a potential new field discovery. Costayaco-1 is located in the Chaza Block, Putumayo Basin, southern Colombia. Solana holds a 50% working interest in the Chaza Block with Gran Tierra Energy Inc., the operator, holding the other 50% interest.
Costayaco-1 is the Company's second Putumayo Basin potential new pool discovery in the last two months. The Juanambu-1 discovery, located in the adjacent Guayuyaco Block, was announced March 19, 2007, and is currently being tested. The Chaza block is subject to a fiscally attractive Agencia Nacional de Hidrocarburos royalty/tax contract with no additional state participation.
Costayaco-1 reached a total measured depth of 2,612 meters (8,570 feet) on May 10, 2007. Initial log interpretations, combined with hydrocarbon shows encountered during drilling, indicate reservoir quality sandstones and limestones with potential oil pay in four zones: the KG Unit of the Rumiyaco Formation, the U and T Units of the Villeta Formation, and in the Caballos Formation. These four formations are productive in the nearby Santana Block, as well as in the Juanambu-1 zones that have been tested to date. Solana notes that there may be upwards of 10 separate reservoirs of interest within these four zones and that the productive lithological package in Costayaco-1 is very similar to that found in Juanambu-1.
The service rig currently testing Juanambu-1 will move to Costayaco-1 to commence testing operations in June. Testing is expected to take four to six weeks. Costayaco-1 is proximal to infrastructure allowing for early monetization of any potential commercial production.
The Pride-17 drilling rig, used to drill Costayaco-1, is expected to be available for additional drilling as of October of this year. To optimize drilling locations, a near term seismic infill program over the Costayaco structure is being considered.
Mr. Glenn Van Doorne, Chief Operating Officer of Solana, a Petroleum Geologist, is the qualified person who has reviewed the technical information contained in this news release.
Forward Looking Statements
Certain information regarding the Company, including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities law and necessarily involve risks associated with oil and gas exploration, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserve estimates, mechanical problems, equipment limitations, environmental risks, competition from other producers and ability to access sufficient capital from internal and external sources; as a consequence, actual results may differ materially from those anticipated.
Solana Resources Limited
Solana (www.solanaresources.com) is an international resource company engaged in the acquisition, exploration, development and production of oil and natural gas. The Company's properties are located in Colombia, South America and are held through its wholly owned subsidiary, Solana Petroleum Exploration (Colombia) Limited. The Company is headquartered in Calgary, Alberta, Canada.
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