Petro Vista Energy has identified four hydrocarbon- rich properties in the Rio Magdalena and Llanos Basins. The basins are characterized as having large blocks (701,663 gross acres), multiple high productivity reservoir targets and large structure prospects.
MORCHITO BLOCK
The Company is pleased to announce that the Morichito-5 well in Colombia has tested oil in two zones and is being completed as a future producer.
The well was drilled to a total depth of 6,160 feet. Logging has identified three potential pay zones at the location with a combined net pay thickness (based on detailed petrophysical analysis) of approximately 16 feet. Swab testing and drill stem tests have been carried out on two Carbonera C7 reservoirs so far. The lower Carbonera C7 reservoir was swabbed at a rate of 375 barrels of oil per day of 23 degree API oil with no water cut. This zone exhibits excellent reservoir quality including high porosities and permeabilities as evidenced by excellent pressure build-up (shut in pressure of 2069 psi). Engineering analysis indicates that this zone has the potential to produce at rates of up to 1,000 bopd using artificial lift methods. The Company is currently evaluating fast track production options.
The other zone that tested oil is in the upper Carbonera C7 reservoir that shows similar excellent log characteristics and potential as the lower zone. The other potential pay zone identified is in the Carbonera C1 formation that is also productive in the area. This zone will be evaluated at a later date.
The Company currently holds a 50% participating interest in the Morichito Block subject to a 25% farming agreement with Petroamerica Oil Corp.
LA MAYE BLOCK
We currently anticipate spudding the second of a four-well exploration program in April 2010. The first well was drilled in November 2009, encountering oil and gas shows in several formations before reaching TD at 3,341 ft MD. The participants determined to set 4 ½ inch production casing down to TD. Testing of this well will be considered upon completion of the second well. Petro Vista has 25% participating interest in La Maye.
Our plan, since inception, has been to drill two of the four wells, under a prepaid turnkey contract, evaluate results and then determine the best plan forward on the Block. Our anticipated well costs are approximately US$2million per well. Five prospects have been identified in the block, containing both limestone and clastic reservoirs. La Maye is in close proximity to existing infrastructure with gas and oil pipelines running through both the northern and southern portions of the Block.
The prospect play types for prospects 1 and 2 (1100 acres and 935 acres respectively) are based on the Cicuco field. According to Government sources (ANH) as other published sources (See also Petro Vista NI 151 report and Argenta annual report 2007), the Cicuco field originally discovered in 1956 by Ecopetrol has produced over 45 million barrels of 43 degree API oil at rates of 400 to over 6,000 bopd and over 180 BCF of associated gas. Average per well production in the Cicuco field was approximately 2.3 MMBO. Per well production reached a high of over 5 MMBO. Production from this reef play comes primarily from Oligocene age Cienega de Oro Formation porous limestones. The prospects occur along a proven structural arch along trend to known fields and extending from known source rock and maturation areas (kitchen).
Extension request to defer testing of La Maye 1 approved by Ministry until August 28th. Want to drill second well then test back to back.
Currently reprocessing additional data to confirm new prospects. Plan is to high grade 3 drilling prospects for decision of La Maye #2 location.
One new southern prospect with large upside being considered. 110.52 MMBO in place 27.63 MMBO recoverable.
Drilling of La Maye #2 anticipated July 2010
SINU NORTE - BLOCK SSJN - 5
Partnering with SK Energy Co Ltd. ("SK Group") the Company was successful in its joint bid for Block SSJN-5, located in the Lower Magdalena Basin of Colombia. Pursuant to a Joint Bidding Agreement Petropuli and SK Group will each hold a fifty percent (50%) participating interest in Block SSJN-5, with SK Group acting as operator. SK Energy is a leading Korean multinational conglomerate with oil production, development and exploration projects as well as integrated gas development projects around the world.
The SSJN-5 Block consists of 570,200 acres (230,854 gross hectares) and contains at least six identified leads or prospects which will be detailed during the first exploration phase of the concession contract with the ANH. The Block is located along the southeastern margin of the Lower Magdalena Valley Basin and, similar to other blocks in the area, lies along the pathway for oil and gas migrating from the deeper hydrocarbon kitchen in the center of the basin. Potentially productive reservoirs include the Miocene Tubara and Porquero formations that have produced in acreage in the Lower Magdelena Valley (El Dificil Block - 73.75 million barrels of oil equivalent reserves - gas/oil/condensate - IHS Inc. independent report "Colombian Resource Paper" (NYSE:IHS) 2008).
The Phase 1, 2D seismic program has been rescheduled and is anticipated to commence Q3 2010 due to seismic crew availability and an ongoing review of other potential geophysical methods of data acquisition (gravity magnetic surveying, surface geochemistry). The goal is to reduce the overall cost of the geophysical program. Internal geotechnical studies completed to date have identified several interesting potential play types with structural traps in five prospect areas. This block is located close to La Maye and is surrounded by a number of producing fields. Drilling of one well in Block 5 is anticipated during 2011 (per contract obligations) as part of the overall 3-year exploration term.
Assuming PetroAmerica Oil Corp. (“PetroAmerica”) earns its interest under the terms of our farmout agreement, the Company will retain a 25% participating interest in Block SSJN-5. As part of the farmout terms, Petro Vista will be carried on the 2D seismic program. In addition, the Company granted PetroAmerica the option to acquire the Company’s remaining 25% interest in the Block for $3 million. Petro America has 60 days to exercise this option, following their receipt of the final report on the 2D seismic program. PetroAmerica granted the Company an option to purchase PetroAmerica’s common shares for US$3,000,000 with the price per share being 20% higher than the 30 day weighted average closing price immediately prior to date on which PetroAmerica exercises its option to acquire the remaining 25% participating interest in Block SSJN-5. The Company may exercise this option at any time, in whole or in part, within three years from the date the parties enter into the definitive agreement to sell the initial 25% participating interest in Block SSJN-5