PetroLatina Energy Plc, an independent oil and gas exploration, development and production company, focused on Latin America, announces that initial production testing at its Serafin Well #1 has produced results at the higher end of expectations.
The Serafin well #1 is part of the Serafin Gas Development in which PetroLatina has a 50% interest. The project offers early cash flow and is expected to materially increase the Company’s revenues from its Colombian operations.
Results of Initial Flow Test
On February 13, 2007 the fourth point of the test (on a 48 hour extended flow rate) was completed through a 40/64” choke with a stable flow rate of 14 million cubic feet per day of gas, a flowing tubing head pressure of 1530 psi and a shut in casing pressure of 1716 psi.
Pressure recorders will remain in place for a minimum of 7 days after the well is shut in and detailed reservoir data will be available between one and two weeks following their recovery.
Based on information available in Colombia, the current regulatory commission for energy and gas (“CREG”) gas price for the area in which the development is located is approximately US $3 per thousand cubic feet. The gas is planned to be sold to local industrial users.
Pipeline Tie in
The Company will now commence the design and construction of surface facilities and a 3.5 kilometre trunk pipeline to tie in to the main Colombian gas pipeline infrastructure. Completion of this final part of the project is expected early in the second quarter of 2007 with first commercial gas deliveries planned for late second quarter 2007.
The estimated cost of the development, including the gas pipeline and tie in, is US $1.36 million (US $680,000 net to PetroLatina). The cost of the development will be met from available cash resources.
Greg Smith, Chairman and CEO commented:
“These test results have met our highest expectations and we are now accelerating the required surface development and will commence commercial gas sales as quickly as is possible. The completion of this extremely positive test and the resultant early cash flows that it will generate, coupled with the initiation of the seismic shoot on the Midas and La Paloma exploration blocks, put our company in a strong position to continue our growth in Colombia. We will report in two to three weeks with the detailed test results and reservoir analysis.”
