CALGARY and LONDON, Jan. 15 /CNW/ - Solana Resources Limited (TSX-V: SOR; AIM: SORL) is pleased to announce that the Costayaco-2 well, a 560 metre step out to the northeast of the Costayaco-1 discovery well, has been successfully drilled, logged and cased. The Costayaco field is located in the Chaza Block, Putumayo Basin, southern Colombia.
Costayaco-2 reached a total measured depth of 8,600 feet on January 2, 2008, and encountered similar hydrocarbon shows and lithology as Costayaco-1. Initial log interpretations, combined with the hydrocarbon shows, indicate reservoir quality sandstones with potential oil pay in the U and T units of the Villeta formation, and in the Caballos formation.
The Pride-6 service rig is being mobilized to initiate testing of the hydrocarbon reservoirs encountered during drilling. Testing operations are expected to begin in mid-January and scheduled to be completed in mid-February.
The Pride-17 rig used to drill Costayaco-2 was released on January 8, 2008, and is currently being moved to the Costayaco-3 location. Costayaco-3 is located approximately 960 meters west southwest of the Costayaco-1 location. Drilling is expected to commence in late January and be completed in late February.
Production from Costayaco-1 has increased to approximately 3,500 barrels of oil per day ("bopd") gross, or 1,610 bopd net of royalty to Solana, as a result of commingling the Caballos and the Villeta T zones.
Costayaco-1 oil production is currently being trucked to new offloading facilities at Uchupayaco which is connected to existing pipeline infrastructure. Any crude oil production from Costayaco-2 will be trucked to the same facilities. Preparations for the 11 kilometre pipeline from the Costayaco field to Uchupayaco are under way. Upon completion, this pipeline will replace trucking operations.
The acquisition of the previously announced 70 square kilometres of 3-D seismic covering the Costayaco oilfield has been completed. This data is currently being interpreted and will be used to assist with the positioning of future development wells in the Costayaco field. Acquisition of 41 kilometres of new 2-D seismic data to define additional exploration potential in the Chaza Block is continuing.
Solana holds a 50% working interest in the Chaza Block with Gran Tierra Energy Inc., the operator, holding the other 50% interest. The Chaza block is subject to a fiscally attractive Agencia Nacional de Hidrocarburos contract with no additional state participation.
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.
NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS
RELEASE. THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE