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Pan Andean, an AIM-listed oil & gas producer, Tuesday announced the successful completion of a critical new 2D seismic survey in the Antorcha Block.
The block licence is located in the prolific Middle Magdalena Basin of central Colombia.
The licence was signed in November 2007, after which Pan Andean accelerated an exploration programme to confirm the block's prospectivity.
Additional seismic covering 70km has been reprocessed. Regional studies and surface geological work are also complete and have been integrated with the newly acquired data.
Pan Andean's team is working to identify the optimal locations for drilling and acquiring necessary drilling permits.
The Antorcha block neighbours an existing oil producing area, operated by the state petroleum company Ecopetrol, and is also adjacent to areas being explored or in production with several international operators.
The Antorcha block is located up-dip of existing oil producing fields: the Velasquez-Palagua field with more than 300 million barrels of oil reserves and the Teca-Cocorna-Nare-Jazmin heavy oil field with more than 1,000 million barrels of oil in place.
Preliminary geological and petrophysical studies and the most recent data acquisition suggest potential for moveable heavy oil at shallow depths of less than 2,000 feet.
Between 1 and 2bn barrels of oil in place could exist on the block, of which 100 to 300 million barrels may be recoverable reserves, using parameters of nearby fields: i.e. porosity 20 - 25%, oil saturation 60%, average net oil thickness of 100 - 200 feet, recovery factor of 10 - 15%.
Expected crude quality could be in the range of 10 to 20 API, well within the economic processing capabilities of existing fiscal terms, technology and anticipated oil price.
Subject to confirmation of drillable targets and well rig availability, a limited drilling programme will be undertaken in 2009.
Managing Director, David Horgan, said: "This is a key step in Pan Andean's development. With the seismic and regional studies now complete, we can concentrate on drilling and finding quality partners."
Pan Andean has already been approached by oil players, he said.
This activity will illustrate what it believes to be the "huge" value locked in Antorcha, he said.
Obviously it hopes that drilling will confirm the presence of commercially viable hydrocarbons.
Farming out to a financially and technically strong partner will allow it to again demonstrate both the value in the block, and its desire to monetise the asset to the best advantage of its shareholders, he said.
(END) Dow Jones Newswires
08-12-08 0240ET
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