VANCOUVER, Aug. 1, 2019 /CNW/ - CruzSur Energy Corp. (the "Company" or "CruzSur") (TSXV: CZR), a growth-oriented oil and gas venture with significant assets in Latin America, has commenced a US$22 million phased development program at Sinu-9 (SN-9), a high-priority Colombian natural gas prospect, and is pleased to provide an update on other projects.
SN-9 is an 18,000 acre project located in the Lower Magdalena basin, a prolific hydrocarbon producing region near the Caribbean coast. CruzSur holds a 72% interest in the SN-9 block, which is adjacent to Canacol Energy's Esperanza block.
The Company believes SN-9 could be an important new source of natural gas in Colombia at a time of market imbalance caused by steep decline rates at the country's main producing fields, Chuchupa-Ballena and La Creciente. Additionally, delays at the 2500 MW Hidroltuango project are exacerbating demand for thermal energy generation, which is mainly produced with natural gas. LNG import prices in northern Colombia exceed $10/MMBTU. Through a phased approach, CruzSur expects to grow reserves and provide a more stable supply of natural gas in the country.
Phase 1 will see the finalization of environmental and prior consulting processes, well seismic, the re-entry of Hechizo-1 well and two exploration wells.
Phase 2 will focus on evaluating the Magico and Milagroso areas, including acquiring 3D seismic and drilling two additional exploration wells.
Experienced environmental impact specialist Consultoría y Medio Ambiente S.A. (C&MA), has been engaged to obtain all necessary permits and licenses to commence exploration on the block. Community relations activities will be carried out by Aventtus S.A.S, a firm with extensive consultation experience with communities in the area.
Drilling rigs are expected on site in Q1 2021.
The Maria Conchita Block covers an area of 60,076 acres in the Department of La Guajira, Colombia and neighbours the Chuchupa-Ballena to its north, which in 2018 accounted for approximately 40% of Colombia's daily gas output.
An evaluation program is underway at Maria Conchita to define total resources and determine the most appropriate development plan for the Uitpa and Jimol formations. Possible re-entry in wells Aruchara-1, Tinka-1 and Istanbul-1 could test several prospective zones based on new geological and seismic re-interpretation.
In accordance with the Company's environmental security policy, CruzSur has analyzed the actual status of other wells in the area that were abandoned by prior operators. The Company has detected gas leaks in the Aruchara-1 well and, given the potential environmental risk, has requested authorization of environmental authorities to re-enter the well and control the situation.
CruzSur holds an 80% participating interest in Maria Conchita which it operates under its 100% owned subsidiary's Colombian branch, MKMS Enerji Sucursal Colombia ("MKMS").
Sur del Rio Deseado Este (SRDE)
Sur del Rio Deseado Este (SRDE) is a heavy oil field located in the prolific San Jorge basin in eastern Patagonia, Argentina.
CruzSur, through its operator Alianza Petrolera, with a 54.14% current interest in the exploitation area, is analyzing all possible solutions to increase production and recoveries in this area, including new lifting methods through pulling works in several existing wells, as well as studying the possibility for new production stimulation methods and EOR possibilities from heat utilization to polymer injection.
The Company believes that production and recovery factors can be increased in this area with the utilization of the right technologies reaching values of at least 10%. Cruzsur is in the process of designing and executing several tests and possibly pilot projects to define the best and most attractive technologies and methods of production.
Estancia La Mariposa & Lomita De La Costa
The Company also holds an 16.38% in the Estancia La Mariposa & Lomita De La Costa projects located in Argentina's Santa Cruz province, covering an area of more than 2,700 ha. With current 1P gas reserves in Estancia la Mariposa, the field has gas and condensate production from the Comodoro Rivadavia and Mina el Carmen Formations. In Lomita de la Costa field, an early exploration well tested 3 MMSCFD showing presence of gas needing more evaluation and more drilling with sufficient gas volume for an economic development of the field.
TECPETROL is the operator and Alianza Petrolera has an ORR over the production. Produced oil is sold at Tecpetrol's El Tordillo facility, gas production enters TGS pipeline. The exploitation contract expires May 2033.
CruzSur supports the work done by the operator in this area and believes that gas and condensate production could be increased, in both fields, with a new drilling program. CruzSur is currently reviewing its options with its partners and seeks to implement a program before the end of 2019.
Mr. Iacono is pleased to state "the new management of the company is very proud of the progress reached during the last two months of work done to restructure the company, reevaluate the assets in both Colombia and Argentina and redefine the objectives of the Business Plan including the associated options to realize all required activities, including possible pilot tests and financing of the assets."
About CruzSur Energy Corp.
CruzSur Energy Corp. is a publicly traded E&P company focused on proven oil & gas plays in Latin America. The Company holds a large diversified portfolio of producing, development and unexploited assets in Colombia and Argentina where it will leverage its amplitude of technical expertise and proven track record building companies and creating value.
Except for the statements of historical fact, this news release contains "forward-looking information" within the meaning of the applicable Canadian securities legislation that is based on expectations, estimates and projections as at the date of this news release. The information in this news release about the completion of the operations described herein, and other forward-looking information includes but is not limited to information concerning the intentions, plans and future actions of the parties to the transactions described herein and the terms of such transaction.
Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, risks related to the Company's inability to perform the proposed operations.
The forward-looking information in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. In connection with the forward-looking information contained in this news release, the Company has made assumptions about the Company's ability to complete the planned operations and activities. The Company has also assumed that no significant events will occur outside of the Company's normal course of business. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE CruzSur Energy Corp.
For further information: CruzSur Energy Corp.: Serafino Iacono, Interim CEO; Marianella Bernal Parada, CFO, Tel: (604) 609-6110