TORONTO, Aug. 4 /CNW/ - Alange Energy Corp. (TSXV: ALE) announced today that after extensive testing, the Cerrito-1 well, located in the Cerrito block of the Catatumbo basin, has turned out 1.2 MMCFD, that will immediately be incorporated on stream into the pipeline to Cucuta, the capital city of the Department of Norte de Santander, Colombia.
Upon completion of testing, the well produced an average of 1.2 MMCFD of gas and 54 barrels per day of water, with a 32/64" choke, on natural flow, with wellhead pressure of 500 PSI. The incorporation of the production of Cerrito-1 will increase the total gas production of the Cerrito block to 1.6 MMCFD.
Luis E. Giusti, the Company's Chief Executive Officer, commented: "The successful Cerrito-1 workover kicks off the Company's plan to increase the sales of gas four-fold into the city of Cucuta".
On July 1, 2010, the Company initiated the workover of Cerrito-1, consisting of the abandonment of the deeper interval of La Luna formation, and a recompletion on the shallower interval (42 feet of net pay) of the same formation that had presented similar petrophysical characteristics of 12% porosity, 25% water saturation, and reservoir down hole pressure of 1,800 PSI.
The Cerrito-1 well, located 7 kilometres northeast of Cucuta, was originally drilled in September 1980 to a total depth of 9,200 feet, and completed in the La Luna formation in April 1982. It had been inactive since May 2007 due to damages in the electro-submersible pump unit and high water cut.
Alange Energy's current gas deliveries, excluding Cerrito-1, are 1.4 MMCFD comprised of 0.4 MMCFD from the Cerrito block and 1.0 MMCFD trucked from the Carbonera block. The execution of infrastructure projects in Carbonera is underway, including a 6-inch, 8-kilometre pipeline and new loading facilities that will significantly reduce trucking times and enable the projected growth in production to reach the market. It also includes the construction of compression and NGL extraction facilities, projected to start up in the fourth quarter of 2010. The plan also considers 9 additional trucks for Carbonera, which have already been purchased, the re-entry of 4 wells in Carbonera, and the drilling of one exploration well in the first quarter of 2011.
The gas from the Cerrito Block is being sold at the wellhead for US$4.00/MMbtu to Invercolsa, a company that distributes and sells retail for industrial and domestic consumption in Cucuta, where there is a significant captive market. The sales contract specifies pricing on a sliding scale as higher volumes are reached, with the next increase taking the price to 4.50 $/MMbtu for volumes ranging from 2.5 MMCFD to 3.5 MMCFD.
The Cerrito Block, located in the Catatumbo Basin of Colombia, is an asset in which the Company holds working interests of 79.8% in the Cerrito 1 and 2 wells, 76% in the T-Burns well, and 81% in the remaining exploration area.
About Alange Energy Corp.
Alange Energy is a Canadian-based oil and gas exploration and production company, with working interests in 12 properties in four basins in Colombia. Further information can be obtained by visiting our website at www.alangeenergy.com.
All monetary amounts in U.S. dollars unless otherwise stated. This news release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian securities laws concerning the business, operations and financial performance and condition of Alange Energy Corp.("Alange"). Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to estimated production and reserve life of the various oil and gas projects of Alange; the estimation of oil and gas reserves; the realization of oil and gas reserve estimates; the timing and amount of estimated future production; costs of production; success of exploration activities; and currency exchange rate fluctuations. Except for statements of historical fact relating to the company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of Alange and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions, risks relating to international operations, fluctuating oil and gas prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the oil and gas industry, failure of plant, equipment or processes to operate as anticipated. Although Alange has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Alange undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
Statements concerning oil and gas reserve estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the oil and gas that will be encountered if the property is developed. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Estimated values of future net revenue disclosed do not represent fair market value.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release
SOURCE ALANGE ENERGY CORP.
For further information: For further information: Peter Volk, General Counsel & Secretary, 416-360-4653, ext. 223