CALGARY, May 13, 2014 /CNW/ - PetroNova Inc. ("PetroNova" or the "Company") (TSX-V: PNA), a company engaged in the exploration and development of oil and natural gas resources in Colombia, today announced that it will abandon the Canelo Sur-2 exploratory well (the "Well") after obtaining inconclusive results from the testing of the Lower "U" Sand of the Villeta Formation. The Well is located in the PUT-2 Block (the "Block") in Colombia's Caguan-Putumayo Basin.
Completion and testing operations at the Well have been ongoing since March 2014 (for details, please refer to the Company's press release dated March 14, 2014). A 7-inch liner was run and cemented in the open-hole section of the Well. Based on the interpreted potential oil pay indicated by oil shows during drilling and open hole and cased hole well log information, a 44 foot interval in the Villeta Lower 'U' sand was perforated and tested. Production testing with a hydraulic pump yielded primarily formation water with intermittent volumes of light oil (up to 3% of the fluid rate) over approximately 48 hours of evaluation. Based on the testing results, the Well will be abandoned and the rig will be released in the near future.
PetroNova considers the results to be inconclusive with respect to the potential for future oil production from this Villeta play trend. Well stability problems were exacerbated by extended delays during drilling which have lead to a number of uncertainties, including:
- the reliability of open-hole and cased log interpretation;
- the effectiveness of zonal isolation (cement distribution and bonding to casing and formation);
- possible formation damage due to substantial invasion of drilling fluid; and
- potentially misleading flow results due to zonal crossflow during the period of suspended operations.
The Well was the first well drilled in the Block and, in conjunction with the seismic data previously acquired, the Company has fulfilled contractual commitments for Phase I of the exploration and production contract with the Agencia Nacional de Hidrocarburos of Colombia (the "ANH"). PetroNova and its partner, Suroco Energy Inc. ("Suroco"), are undertaking a full evaluation of the data collected during the drilling of the Well. The new information will be integrated in their ongoing evaluation of the multiple exploration drilling leads remaining in the Block, which include seismic anomalies observed at the Villeta 'N' sand level, as well as other mapped structural closures along the Canelo-Nogal and Cedrillo trends.
PetroNova currently holds a 75% working interest in the Block, and Suroco holds a 25% economic interest. Application has been made to the ANH for its approval of the conversion of Suroco's 25% economic interest to a full 25% undivided working interest in the Block.
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.
Caution Regarding Forward-Looking Statements and Information:
Certain statements and information contained in this press release constitute forward-looking statements and information (collectively "forward-looking statements") within the meaning of applicable securities laws. These statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "intend", "plan", "continue", "estimate", "budget", "targeting", "project", "expect", "may", "will", "might", "should", "could", "believe", "predict" and "potential" and similar expressions are intended to identify forward-looking statements. Such statements represent the Company's internal projections, estimates, expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Management believes the expectations reflected in these forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon.
In particular, this press release contains forward-looking statements pertaining to the Company's future exploration and development activities and the timing thereof, including the abandonment of the well and the release of the rig. With respect to forward-looking statements contained in this press release, assumptions have been made regarding, among other things, general economic, market and business conditions in Colombia and globally; future crude oil and natural gas prices; the continued availability of capital, undeveloped lands and skilled personnel; the ability to obtain equipment in a timely manner to carry out exploration and development activities; the regulatory framework governing royalties, taxes and environmental matters in Colombia and any other jurisdictions in which the Company may conduct its business in the future; the ability of the Company to obtain the necessary approvals, permits and licences to conduct its operations; the applicability of technologies for recovery and production of the Company's oil and natural gas resources and reserves; the recoverability of the Company's oil and gas resources and reserves; future capital and exploration expenditures to be made by the Company; future sources of funding for the Company's exploration program; the geography of the areas in which the Company is exploring; and adequate weather and environmental conditions.
Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain risk factors, including, but not limited to: general economic, market and business conditions; risks related to the exploration, development and production of oil and natural gas; risks inherent in the Company's international operations, including security and legal risks in Colombia; risks related to the timing of completion of the Company's projects; competition for, among other things, capital, the acquisition of resources and skilled personnel; actions by governmental authorities, including changes in government regulation and taxation; the failure of the Company to obtain the necessary approvals, permits and licences to conduct its operations; environmental risks and hazards; the availability of capital on acceptable terms; the failure of the Company or the holder of certain licenses or leases to meet specific requirements of such licenses or leases; adverse claims made in respect of the Company's properties or assets; failure to engage or retain key personnel; geological, technical, drilling and processing problems, including the availability of equipment and access to properties; failure by counterparties to make payments or perform their operational or other obligations to the Company in compliance with the terms of contractual arrangements between the Company and such counterparties; and the other factors discussed under the heading "Risk Factors" in the Annual Information Form of the Company for the year ended December 31, 2013 and the Company's other continuous disclosure documents filed from time to time with applicable securities regulatory authorities in Canada and which may be accessed on PetroNova's SEDAR profile at www.sedar.com.
Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements included in this press release are expressly qualified by this cautionary statement and are made as of the date of this press release. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.
SOURCE: PetroNova Inc.
For further information:
President & Chief Executive Officer
954 317 3990
Stelvio Di Cecco
Chief Financial Officer
954 317 3990