CALGARY and LONDON, June 19 /CNW/ - Solana Resources Limited (TSX-V: SOR; AIM: SORL) announces that the Palmitas-2 well, testing a structure identified on 2-D seismic and located on the Guachiria Sur block in the Llanos Basin, Colombia, will be suspended for further evaluation.
Palmitas-2 reached a total depth of 6,905 feet on March 28, 2008, and following logging, sidewall coring and MDT tests was cased. While initial log interpretations and MDT tests indicated potential oil pay in the Carbonera C-7 Formation, subsequent extensive cased hole testing with a jet pump failed to yield commercial oil rates. The very low salinity of the produced water in this area of the Llanos basin makes log interpretation difficult. Further evaluation of the well is dependent on mobilizing specialized production logging tools, which are currently not available in Colombia.
Solana remains committed to its Llanos exploration program and plans to spud the Los Aceites-1 well around the middle of July, which is an addition to the Company's 2008 Llanos program. The Los Aceites-1 well will be located 3.3 km south-southwest of, and on trend with, Solana's recent Primavera-1 discovery on the Guachiria block. Available 3-D seismic indicates that the Los Aceites structure is expected to be 70 feet higher than Primavera.
Although exploration activity is normally confined to the January through March dry season in this area of the Llanos basin, Solana, as a test, is currently completing construction of a 3.8 km road and the Los Aceites-1 well location. Based on this exercise, the Company will be able to determine the economic viability of wet season exploration.
Solana is the operator and holds a 100% working interest in the Guachiria and Guachiria Sur blocks. Lewis Energy Colombia holds a 30% beneficial interest in both blocks. The blocks are subject to fiscally attractive Agencia Nacional de Hidrocarburos contracts. The Guachiria block also attracts an additional 13% overriding royalty, applied after government royalties, to Ecopetrol, the State oil and gas company.
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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