Guatemala: Citation Resources reports encouraging oil shows in the Atzam-4 well
12 Oct 2012
Atzam #4 – Drilling Update
- Atzam #4 well is drilling ahead at 3,725ft in good hole condition through the C18 section, a primary reservoir objective for the well
- Encouraging oil shows encountered in the C18 section from 3,695ft, strongly correlate in depth and section to the producing zones in the offset Atzam #2 well
- Formation tops running approx. 260ft higher to the offset Atzam #2 well
- Additional potential production zones are expected to be intersected down to 4,000ft
Block 1-2005 Atzam #4, South Peten Basin, Guatemala
The Atzam #4 well was spudded in late June 2012 and is currently drilling ahead at 3,725ft in good hole condition. The Operator confirms the well is currently drilling through the primary C 18 reservoir target and expects to be drilling through the C19 section and additional potential producing zones over the next 2-4 days. A flow testing program will commence on the significant reservoir sections encountered immediately after completion of drilling and logging the Atzam #4 well. The Operator has today confirmed encouraging oil shows in drilling through the C 18 formation over the past 24 hours, even whilst drilling with a heavy mud weight. These oil shows were encountered from 3,695ft and strongly correlate to the producing formations in the offset Atzam #2 well. The Operator is also encouraged by the strong oil and gas shows encountered in the C 14 carbonates over a 50 foot section, which displayed up to 50% oil saturation in surface samples. The C14 and C15 are producing reservoirs sections in the nearby Rubelsanto field that has produced +30 MMBBL of oil since its discovery in 1976.
Current structural interpretation indicates that the Atzam #4 well is running an estimated 260ft structurally higher than the productive Atzam #2 well, located only 500 meters to the west. The Atzam #4 well is being drilled on the same structure that the Atzam #2 well tested at an initial flow rate of up to 1,200 BOPD of 34°API oil at a depth of 3,850 ft. The Guatemalan Blocks on which Atzam #4 is located have TSX certified 51-101 reserves identifying proved plus probable (P1 and P2) reserve estimates of 2.3 MMBBL.
Atzam and Tortugas Formations
The primary producing formations on the Atzam structure are the C-17 through C-19 formations. The Atzam #2 well had initial flow rates of 1,200 BOPD of 36°API oil which led to new well designs for the Atzam #4 well, and the proposed follow on Atzam #5 well. The second well, Atzam #5, will spud following completion of a flow testing program on the Atzam #4 well.
Recent mapping of the Atzam structure using existing data from previous operators (Basic, Hispanoil) and MEM, and incorporating reservoir data acquired since production initiated in December 2007, indicate the possibility of a structure of comparable size and orientation to that of the existing Rubelsanto field in Guatemala. To date, the Rubelsanto field has produced +30 MMBBL of oil since its discovery in 1976. The field currently continues to produce +1,000 BOPD, 36 years after its discovery.
In addition to the Atzam structures on Block 1-2005, the Tortugas structure is a suspended oil field. Originally 17 wells on Tortugas salt dome were drilled by Monsanto looking for sulphur. One well (T9B) had an oil blowout at approx 2,200 ft and most others had oil shows in multiples zones. The Atzam and Tortugas Fields have had significant previous exploration and development with 2D seismic and previous production wells. In 2012/13 the planned exit production is approx. 1,000 bbl/d based on successful production from the 2 new appraisal wells based on the previous flow rates of wells drilled on the same structure.
Acquisition of 70% interest in Latin American Resources
On July 6 the Company announced it had executed a binding term sheet to acquire a 70% interest in Latin American Resources (LAR), which holds an 80-100% interest in two oil and gas development and exploration blocks in Guatemala (Projects), depending on the participating interest taken up by partners on future wells. The Projects consist of Block 1-2005 and Block 6-93 in the South Peten Basin in Guatemala (Guatemalan Blocks). The Guatemalan Blocks have TSX certified 51-101 reserves identifying proved plus probable (P1 and P2) reserve estimates of 2.3 MMBBL, with significant exploration upside potential. In addition the blocks have had significant previous exploration with the two well appraisal drilling program currently underway with the Atzam#4 well. The Projects and operational infrastructure are owned by LAR together with its minority joint venture partners.
Source: Citation Resources