You are here

Canacol takes two Colombia onshore blocks from OGX

19th December 2014

Canacol Energy has announced that CNE Oil and Gas, a subsidiary of the corporation, has acquired 100 per cent interest in the VIM 5 and VIM 19 exploration and production contracts from OGX Petroleo E Gas S.A.

Canacol Energy has announced that CNE Oil and Gas, a subsidiary of the corporation, has acquired 100 per cent interest in the VIM 5 and VIM 19 exploration and production contracts from OGX Petroleo E Gas S.A.
This strategic acquisition adds 638,000 gross acres to Canacol's gas position in the Lower Magdalena Basin

The National Agency of Hydrocarbons of Colombia (ANH) has formally approved the transfer of title and operatorship of the explorations contracts to CNE Oil & Gas S.A.

“The acquisition of these two contracts adds significant gas resource to our core gas position in Colombia,” said Charle Gamba, president and CEO of CNE Oil and Gas.

Both contracts are located adjacent to the corporation’s 100 per cent operated Esperanza and VIM 21 gas contracts in the Lower Magdalena Basin of Colombia.

The ten prospects and leads identified within the VIM 5 and 19 contracts contain a significant volume of prospective resource (note tabulated volumes by prospect below) assuming all prospects are drilled according to a July 2014 NI-51-101 compliant report from Gaffney Cline and Associates (GCA).

In addition, the Clarinete 1 exploration well drilled on the VIM 5 contract in November 2014 encountered 149 feet of potential gas pay in the primary Cienaga de Oro sandstone (CDO) reservoir, the same reservoir that the corporation produces from at its Nelson and Palmer gas fields on the adjacent Esperanza contract.

The gross unrisked pre drill best estimate for the Clarinete prospect as per the GCA prospective resource report is 540 billion cubic feet (bcf) of gas. Production testing of the Clarinete 1 well is planned to commence in mid-January 2015. The corporation shall formally assign reserves to the Clarinete discovery following completion of the production test.

“Clarinete also adds a very large gas discovery to our inventory of gas discoveries which we will be developing and putting onto production in 2015, where via executed sales contracts we plan to increase production from current levels of approximately 20 mmscfpd to 83 mmscfpd by the end of 2015 through 5 year contracts with pricing up to US$ 8.00 / Mbtu not tied to global oil prices.

“The corporation is currently negotiating new long term gas sales contracts for the Clarinete discovery.”

This strategic acquisition adds 638,000 gross acres to Canacol's gas position in the Lower Magdalena Basin.

Got a news tip? Email news@oilandgastechnology.net