Proof of Concept Achieved; Major Source Rock Discovery
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CALGARY, Aug. 13, 2014 /CNW/ - Petro-Victory Energy Corp. ("Petro-Victory" or the "Company")(TSX-V:VRY)
Petro-Victory Energy Corp announces that the PE-PY-J x1 well has been successfully drilled and has confirmed the prolific Devonian petroleum system of SE Bolivia and NW Argentina extends into the Pirity Basin of Paraguay. The Jacaranda well has proven the first live source rock to be discovered in the Pirity Basin, and significantly derisks the remaining two wells in the drilling campaign.
- First of three well program has encountered over 800m of live Devonian source rock in oil and gas- condensate window
- Inflows of gas into the wellbore, with background gas of 5%, trip gas of 50% recorded, hydrocarbon shows C1 (methane) to C5 (pentane) indicating liquid generation
- No seal at primary target at this location, high quality (20% porosity) reservoir sands encountered above source rock
- First time the Paleozoic play system has ever been proven to exist in Pirity Basin, Paraguay
- Source rock derisks the next well and multiple targets across Petro-Victory's Concession
- Potential gas condensate reservoir identified below target depth, well suspended for future re-entry
- Well drilled ahead of schedule and under budget
- Jacaranda results support Lapacho and Tapir prospects
- Due to positive results, Lapacho elected as next prospect in sequence
Richard F. Gonzalez, President and CEO, comments:
"Since our inception in 2006, we have invested and worked diligently towards our ultimate goal of discovering and producing commercial quantities of hydrocarbons in the Pirity Basin of Paraguay. The successful, on time, under budget, drilling and discovery of a live generative source rock in our first (Jacaranda) of a three well program is a major milestone. We look forward to spudding our second well, Lapacho, in the first half of September. "
Having drilled the PE-PY-J x-1 (Jacaranda) well to a depth of 4500m, it has been suspended for re-entry at a later date. The drilling operation was extremely efficient and the well was drilled ahead of schedule, 300 meters deeper than planned, under budget, and without incident. This is a commendable result for the first deep well to be drilled in Paraguay for 30 years, in a remote location lacking any in-country oil field infrastructure.
The well has confirmed that the prolific Devonian petroleum system of SE Bolivia and NW Argentina extends into the Pirity Rift Basin of Paraguay. Over 800m of live Devonian source rock was penetrated (and was still present at TD), which is at the high end of pre-drill estimates. This positive result has materially de-risked a large and prospective structural play fairway for Petro-Victory's oil and gas-condensate prospects in Paraguay. This is the first time a live source rock has been discovered in the Pirity Basin. The immediate follow on will be to drill the largest single target in the basin, which is the Lapacho prospect just south of Jacaranda.
The Devonian source rock (Los Monos and Icla Formations) comprises a thick sequence (over 1000m in total) of marine black shales and geochemical analysis has confirmed good source rock quality (Total Organic Carbon, average >1% ). Maturity levels are in the oil window and extend down to the gas-condensate window below (4200m). Background gas levels of 5% were recorded during drilling and trip gas exceeded 50%. The hydrocarbon shows comprised C1 (methane) to C5 (pentane) indicating liquid hydrocarbons throughout. With input from external unconventional experts, Petro-Victory's operating partner, President Energy, is conducting an evaluation to determine whether the Devonian also represents an unconventional shale gas resource in addition to its obvious qualities as an excellent conventional source rock. Results of the unconventional analysis will be released in due course but the immediate priority is to pursue high graded conventional prospects charged by the now proven Devonian petroleum system.
The primary reservoir target of the Jacaranda well was predicted to be a Carboniferous sandstone lying directly above the Devonian source rock. The well confirmed that a very well developed reservoir quality sand is present (high average porosity, 20% and 90m thick), however the Carboniferous sandstone (Tupambi formation) was not sealed at this location and hydrocarbons migrated away. The Cretaceous Pirgua target contained low levels of migrated Devonian gas but no effective trap geometry. The presence of Devonian gas demonstrates the ability for hydrocarbon migration in the basin.
The lack of an effective Carboniferous target at this location has been tempered by discovery of a thick, live Devonian source rock immediately below. The exploration objective is to find the first conventional reservoir sand developed within or just below the Devonian source rock sequence. Jacaranda did not drill deep enough to encounter conventional Devonian reservoirs and seismic evidence suggests the first reservoir sand will occur some 150m below current TD. For this reason the well has been suspended to allow deepening to reach these conventional reservoir targets at a later date.
Lapacho and Tapir
Due to the positive result at Jacaranda, the immediate priority is to move the rig directly to the Lapacho prospect where seismic indicates the presence of a 400m section predicted to contain thick reservoir sands (Santa Rosa Formation) lying at a drill depth of 4300m, immediately below the Devonian source rock. The QG 1 rig will now be mobilized the 17km from Jacaranda to the Lapacho location, with a view to spudding before mid September.
The Tapir prospect will now be drilled after Lapacho as well three in the Pirity Basin drilling campaign. Drilling results at Jacaranda have not changed our positive view of Tapir despite the shallow Cretaceous targets at Jacaranda have been shown to contain no hydrocarbons at this location. The Cretaceous Lecho Sand target was penetrated at Jacaranda as predicted and had excellent reservoir properties (80m thick, 25% average porosity). The test failed due to the critical risk as identified pre-drill, lack of topseal at this location and any hydrocarbons present will have leaked further up-dip beyond the current prospect area.
Petro-Victory Energy Corp. is a publicly held British Virgin Islands exploration company focused on Latin America with headquarters based in Fort Worth, Texas, United States. Petro-Victory pursues its growth by applying a combination of technical knowledge (its own and third parties' knowledge and expertise) with its current primary focus in the Pirity Block Concession located in Paraguay.
Petro-Victory continues to apply a variety of strategies and procedures to create and add value to its assets and deliver earnings, reasonable profits, and business success to its shareholders
Neither the 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 release.
Advisory Regarding Forward-Looking Statements and Resource Disclosure
In the interest of providing Petro-Victory's shareholders and potential investors with information regarding Petro-Victory, including management's assessment of Petro-Victory's future plans and operations, certain statements in this press release are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation (collectively, "forward-looking statements"). In some cases, forward-looking statements can be identified by terminology such as "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "intend", "may", "objective", "ongoing", "outlook", "potential", "project", "plan", "should", "target", "would", "will" or similar words suggesting future outcomes, events or performance. The forward-looking statements contained in this press release speak only as of the date thereof and are expressly qualified by this cautionary statement.
Specifically, this press release contains forward-looking statements relating to but not limited to: our business strategies, plans and objectives, drilling and exploration expectations, future well operations, the anticipated benefits of the recently drilled well, and future operations on the recently drilled well. These forward-looking statements are based on certain key assumptions regarding, among other things: exploration activities; the receipt, in a timely manner, of regulatory and other required approvals for our operating activities; the availability and cost of labour and other industry services; the continuance of existing and, in certain circumstances, proposed tax and royalty regimes; and current industry conditions, laws and regulations continuing in effect (or, where changes are proposed, such changes being adopted as anticipated). Readers are cautioned that such assumptions, although considered reasonable by Petro-Victory at the time of preparation, may prove to be incorrect. The resource information contained in the news release incorporated into this release is that of President Energy PLC and not the Company's. The resource disclosure for the Company is contained in our Final Prospectus dated July 11, 2014, and our other disclosure as filed with Canadian securities regulatory authorities at www.sedar.com. Actual results achieved will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. These and additional risk factors are contained in our Final Prospectus dated July 11, 2014, as filed with Canadian securities regulatory authorities at www.sedar.com.
The above summary of assumptions and risks related to forward-looking statements in this press release has been provided in order to provide shareholders and potential investors with a more complete perspective on Petro-Victory's current and future operations and such information may not be appropriate for other purposes. There is no representation by Petro-Victory that actual results achieved will be the same in whole or in part as those referenced in the forward-looking statements and Petro-Victory does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities law.
SOURCE: Petro-Victory Energy Corp.
For further information: Petro-Victory Energy Corp., Richard F. Gonzalez, President and CEO, 972-239-3084; Petro-Victory Energy Corp., Mark Bronson, CFO and Corporate Secretary, 817-838-4744; Brisco Capital Partners Corp., Scott Koyich, 403-619-2200