Gran Tierra Energy announces oil flowing from the Loma Montosa formation after the successful drilling of a horizontal multi-stage fracture well in the Puesto Morales field.
The Board of Andes (AIM: AEN; BCBA: AEN) is pleased to note the announcement by Gran Tierra Energy Inc. (GTE) that it has successfully drilled and achieved steady oil flows from their first horizontal multi-stage fracture well in the Loma Montosa formation located in the Puesto Morales field. On 27 October 2012, the PMN-1117 horizontal well reached a total measured depth of approximately 2,130 metres through the Loma Montosa formation (1,408 metres true vertical depth). The well has a horizontal section of 483 metres and multi-stage fracture stimulation was performed. On 2 December 2012, production testing was initiated and in the first 24 hours the well flow tested at a rate of approximately 840 bopd from the tight oil Loma Montosa reservoir. GTE reported that this well is currently flowing naturally at a choke-restricted rate of 212 bopd of 33.8° API oil with a 0% water cut.
This announcement confirms Andes understanding of the potential of its own Laguna el Loro block, located just 30 km to the south of PMN-1117. The Laguna El Loro block covers an area of 124,788 acres (505 km2) and is surrounded by producing fields with infrastructure available for both treatment and transportation. 2D and 3D seismic has been shot over a significant portion of the block and 8 exploration wells have been drilled with encouraging hydrocarbon indications in many formations. 7 of these wells penetrated the Loma Montosa formation with total thicknesses ranging from 300 metres in the north-west of the area to over 400 metres in the south-east. Oil shows were seen in the Loma Montosa formation in the El Piquillin x-1 well drilled in the Laguna el Loro block by YPF in 1974. The Loma Montosa formation has also proven to be a good producer in the nearby Tecpetrol operated Agua Salada area, approximately 25 km north-west of Laguna el Loro.
Andes is currently carrying out a complete re-interpretation of existing seismic and well data where multiple conventional and unconventional targets are being identified, the Loma Montosa formation being one of them. GTE's announcement validates Andes's acreage position, with its portfolio of world-class assets in the prolific Neuquén basin with proven conventional and unconventional plays.
Nicolás Mallo Huergo, Chairman of the Company commented: "The production rates achieved by GTE in the Loma Montosa formation highlights the potential of "Laguna El Loro" whilst validating our understanding of the geological play concepts in this block. The south-east region of the Neuquén basin could potentially add several hundred million barrels of oil reserves that would have a significant positive impact on Andes in the short term."
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