Our Yenac success is a significant discovery in the region.
The geology of the Central Llanos is characterized by sandstone reservoirs, trapped against down to basement faults. Wells into these structures are characterized by production of up to 3,000 bopd per well and existing pools in the region have typically ranged between one and 25 million barrels. We are exploring for these targets using 3D seismic to define faults and the extent of potential reservoirs.
Casimena
Our Yenac-1 discovery well was drilled in the first quarter of 2010 and was placed on production at rates exceeding 1,800 bopd. Ongoing results justified additional drilling into this newly discovered pool. Our Yenac-2 well was completed in December 2010 with initial production of almost 3,000 bopd. Following Yenac-2, we drilled another successful exploration prospect, Mantis-1, approximately one kilometre northeast of Yenac targeting a separately defined geological structure. The well was placed on production at initial rates of over 1,800 bopd, helping production from this block to increase to over 5,500 bopd in February 2011. This area has been assigned five million barrels of remaining total proved plus probable reserves at December 31, 2010.
In early 2011, we drilled Yenac-3 and successfully tested a new, lower Mirador formation that was not evaluated in our December 31, 2010 reserve report. The well produced at rates of over 700 bopd of heavy, 12 degree API oil.
We have now identified five additional Yenac locations and up to another two locations for the Mantis oil pool. We are planning to implement a full field development plan once we obtain our exploitation license, expected to be received in the third quarter of 2011.
Mapache, Castor and Casanare Este
In 2010, we drilled two Mapache exploration wells, Mapana-1 and Manzanillo-1, to follow-up previous discoveries made on the Block in 2009. The Manzanillo-1 well produced at rates between 250 and 350 bopd. In 2011, we plan to drill at least on exploration well, Disa, and acquire 154 km2 of 3D seismic.
In 2010, we drilled Capybara-1 in the northern part of the Castor Block. The well tested 600 bopd of light oil. We further evaluated the discovery and believe that Capybara-1 penetrated the down-dip portion of the structure. In 2011 we plan to drill a second well up-dip. Independent reserve engineers assigned 2.8 million barrels of total proved plus probable reserves on the block. In addition, we plan to acquire 154 km2 of new 3D seismic on the Block.
On our Casanare Este block, we are planning to acquire 116 km2 of new 3D seismic data in 2011.
Petrominerales has now made five significant discoveries in the Central Llanos Basin. We have 11 prospects and leads currently in inventory, and plan to have a rig drilling working full time on these blocks through 2011.
Low risk development opportunities
Our first two contracts in Colombia were the Neiva and Orito Incremental Production Contracts (IPCs). These contracts got us started in Colombia with a number of low-risk drilling opportunities that led to a base of cash flows. In 2010, our share of production from these two blocks averaged 6,257 bopd. We currently have more than 70 lower risk development drilling locations on these blocks along with secondary recovery opportunities.
Neiva, Upper Magdalena Basin
Neiva is on a mature field with multi-zone potential. Although Neiva is our smallest block, it is the source of a stable production base with development and enhanced recovery potential. Positive results from our recent drilling efforts increased our share of production to 3,432 bopd in 2010, an increase of 1,086 bopd compared with 2009. On a gross field basis, Neiva is now producing over 8,000 bopd, which exceeds the field’s initial peak production rate reached in 1983.
Our success at Neiva is the result of our effective operational team, which has been utilizing multi-stage fracturing methods and other leading-edge drilling and completions technologies to maximize results. We are targeting three reservoir horizons on the block, each of which consists of sand-shale sequences, the Honda, the slightly deeper Doima Chicoral and the recently discovered Monserrate formation.
We have a development drilling inventory of over 30 locations and during 2011 we anticipate drilling up to 26 wells.
