CALGARY and LONDON, Aug. 6 /CNW/ - Solana Resources Limited (TSX-V: SOR;
AIM: SORL) is pleased to announce that the Costayaco-5 well, a down dip field
delineation well located approximately 1,120 meters west of Costayaco-2 and
1,060 metres north west of Costayaco-1, has been successfully drilled, logged
and cased. Initial evaluation indicates that Costayaco-5 has potential oil pay
in four separate formations.
The Costayaco field was discovered in the second quarter of 2007 and is
located in the Chaza block, Putumayo Basin, southern Colombia. The field is
currently producing approximately 7,000 barrels of oil per day ("bopd") gross,
3,220 bopd net of royalty to Solana.
Solana holds a 50% working interest in the Chaza block with Gran Tierra
Energy Inc., the operator, holding the balance. This block is subject to an
Agencia Nacional de Hidrocarburos contract.
Chaza Block: Costayaco Field
Costayaco-5 Drilling and Testing
Costayaco-5 reached a total measured depth of 8,703 feet on July 27,
2008, encountering the same reservoir sequences as the other Costayaco wells
with good oil shows in the Rumiyaco Kg formation, the Villeta U and T
formations and the Upper Caballos formation.
Initial log interpretations, combined with cuttings and shows indicate
excellent reservoir with fair to good oil saturations in the primary Villeta T
formation, with thicknesses comparable to previous wells in the field. No
definitive oil-water contact is apparent in the Villeta T however, testing
will be required to confirm whether water is present in certain intervals. The
Upper Caballos also appears to have good oil saturations and thicknesses
comparable to previous wells drilled in the field. The Lower Caballos is well
developed, but appears to be water bearing. The top of the Villeta T and the
top of the Caballos were encountered at shallower depths than expected and oil
shows were encountered deeper than expected in both the Villeta T and the
Upper Caballos reservoirs; both results have the potential to add significant
reserves to the west flank of the field. Testing operations are expected to
commence in mid August and will take approximately one month to complete.
Costayaco-4 testing is expected to commence in early August, 2008;
delayed due to the test rig being retained for longer than expected on another
location. At Costayaco-4 initial log interpretations, combined with core
samples and hydrocarbon shows, indicate reservoir quality sandstones with
approximately 16 ft of potential oil pay in the Rumiyaco Kg, 18 feet in the
Villeta U, 38 feet in the Villeta T, and 134 feet in the Caballos formations.
This is approximately 25% more potential net pay than in any of the previous
three wells in the field. The testing program is expected to take
approximately one month.
A continuous delineation and development drilling campaign in the
Costayaco field is planned for the balance of 2008 and through 2009. The
details of this program will be finalized in the fourth quarter of 2008.
An 8 inch diameter, 10 kilometer pipeline from the Costayaco field to the
Uchupayaco Station on the existing pipeline system was completed on July 29,
2008, and is currently being tested. This new pipeline will have a capacity of
25,000 barrels oil per day ("bopd"). Initial throughput will be approximately
8,500 bopd due to downstream pipeline constraints. Options to increase
production utilizing trucks to bypass infrastructure constraints, and to move
additional volumes north to Neiva, are being developed with gross Costayaco
field production expected to rise to 13,000 to 15,000 bopd by year end 2008,
with additional production capacity behind pipe.
Additional infrastructure expansion to accommodate the anticipated
increase in production from the continuing Costayaco drilling program and to
negate the need for trucking is advancing.
Llanos Basin: Guachiria Block:
Primavera-1 Extended Term Test
The Company has obtained necessary approvals and plans to initiate a long
term test at Primavera-1 within the next week. Primavera-1 was drilled in
February - March 2008, and tested in May 2008. Eight feet of perforations in
the Carbonera C-7 formation tested at a pump constrained rate of 650 bopd
(gross), 365 bopd net of royalty to Solana, over a continuous 24 hour period.
The well produced with a stable water cut of approximately 58% during this
Los Aceites-1 Drilling
Drilling commenced on the Los Aceites-1 exploration well on August 2,
2008. This well is testing a closed structure that was defined with 3-D
seismic and is targeting the Carbonera C5 and C7 formations. Los Aceites-1 is
approximately 3.3 kilometers south of, roughly 80 feet structurally higher
than, and on trend with the Primavera-1 well that tested 650 bopd from the
Carbonera C-7 formation. The well has a projected depth of 7,100 feet and is
anticipated to take 20 days to drill, with testing to follow.
Solana is the operator and holds a 100% working interest in the Guachiria
block with Lewis Energy Colombia holding a 30% beneficial interest. The block
is subject to an Agencia Nacional de Hidrocarburos contracts with a 13%
overriding royalty payable to Ecopetrol that is applied after government
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.
NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS
RELEASE. THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE
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