Llanos Basin - Plains Region

Llanos Basin Geology

The Llanos Basin is a flat plains region where productive traps are formed by a series of "up to basin" faults. Tertiary and Cretaceous sandstone reservoirs trap hydrocarbons against these faults in up to five individual sands. Production can often be as high as 2,000 bopd per well and pools in this region have ranged from 3 to 45 million barrels. Discoveries in the area have averaged approximately 8 million barrels. Our drilling program is based on prospects principally identified from 3D seismic and target pools ranging from 3 to 25 million barrels each. Drilling in the majority of the basin is conducted during the dry season which typically extends from mid-December to mid-April; the rainy season can limit access due to flooding. Year-round operations can be conducted in the western portion of the region, which is the case on our Corcel Block.

The below geological sections show how the Canadian basin (top) has been aggressively explored resulting in multiple play types. The potential of the Llanos Basin (below) is just beginning to be realized. Petrominerales is bringing a Canadian approach to this vastly under-explored basin.

Joropo - 72,257 acres

Petrominerales drilled an initial test well on this block, Ojo de Tigre, in March 2006, which was abandoned due to a lack of commercial hydrocarbons. To extend the term of the license, we commenced drilling on a second distinct seismic anomaly in January 2007. This Ojo de Tigre-2 well was initially drilled to a total depth of 8,309 feet and logged and evaluated. Based on our evaluation, and the geological and hydrocarbon indications in this well, a decision was made to side-track to a more favorable bottom-hole location. This sidetracked well from the same surface location, Ojo de Tigre-2 Side-Track, was drilled to a total depth of 8,419 feet and has been cased as a potential oil well. The well was cored through certain prospective intervals with indications of high quality oil bearing sands, which was confirmed by subsequent logs indicating a primary target with net oil pay in excess of 25 feet. The well is currently being tested. This portion of the Llanos Basin is subject to wet surface conditions during the summer months, but we are evaluating alternatives to allow long-term, year-round production of this well. The ultimate size of the prospect will be determined through long-term production testing and potential follow-up drilling. Successful development of this discovery will most likely include upgraded surface access, which would allow for year-round production.

Corcel - 79,815 acres

Located in the western portion of the Llanos Basin, 3-D seismic acquired by Petrominerales indicates the presence of a large structure in the southwest portion of the block. We are planning to drill this prospect in the second quarter of 2007. Two producing fields are located near this block, one has produced 70 mmbbl since being discovered in 1981, and a second discovered in 1990 has produced 3.6 mmbbl to 2005.

Casanare Este - 78,815 acres

At least three prospects have been identified at Casanare Este from an initial evaluation of our 3-D seismic survey acquired in 2006. Our interpretation suggests that the block is on trend with nearby oil fields producing from traps created by regional faults. One of these fields has produced 8 mmbbl from two wells with current production of 600 bopd, and another has produced 6.7 mmbbl from two wells and is still producing 3,800 bopd. Our first exploratory well on the block is planned for the second quarter of 2007.

Casimena - 107,704 acres

An excellent structural lead has been identified through a recently completed 3-D seismic program. An exploration well, Mapuro-1, targeting this structural anomaly will be drilled this spring. A nearby well was recently re-completed in the same target formation and produced at an initial rate of approximately 2,000 bopd.

Castor - 108,741 acres

Formerly a part of the Chicago TEA, Petrominerales was awarded the Castor exploration block in 2006. Our initial work commitment is to acquire a 30 square kilometre 3-D seismic survey and drill one well by June 2008.

Mapache - 107,861 acres

The Mapache exploration block, awarded in 2006, was also formerly part of the Chicago TEA. Plans call for the acquisition of a 3-D seismic survey and drilling two exploration wells, which are scheduled for the first quarter of 2008. Two nearby fields have produced 8.7 mmbbl and 11.2 mmbbl to date.

Exploration Proposals

Petrominerales has also proposed exploration contracts at Guatiquia (26,341 acres), which adjoins our Corcel block, along with Jaguar (64,939 acres) and Jabalá­ (4,183 acres), which are adjacent to our Joropo block.