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.
