Platino Energy Corp. Reports Oil Discovery at COATI-1 Well and Estimated Year-End 2013 Available Funds of US$0.80 Per Share
24 Octobre 2013 - 12:30AM
Marketwired Canada
Platino Energy Corp. ("Platino" or the "Company") (TSX VENTURE:PZE) reports a
light oil discovery on the Coati Block in the Putumayo Basin of Colombia and
provides a financial update.
Coati Block Discovery
The Coati-1 well was cased to a total depth of 10,800 feet in late July with
initial testing finishing September 23, 2013. Hydrocarbon shows and log pay were
encountered in six prospective reservoir units and Platino has tested light oil
from three of these reservoir zones.
Platino performed extensive drill-stem tests ("DST's") and short-term production
tests in the Caballos Formation ("Caballos"), the principal pre-drill reservoir
target, and DST's only in both the Villeta U Sandstone ("Villeta U") and Caliza
A Limestone ("Caliza A"). Three additional reservoir targets, the Villeta T
Sandstone ("Villeta T"), the Villeta N Sandstone and the Caliza B Limestone were
identified as hydrocarbon bearing from well-logs and drilling shows but were not
tested due to timing and cost constraints.
Caballos Formation
The presence of a 56 foot gross oil column and production test results from the
Caballos at Coati-1 confirms the Company's pre-drill interpretation of a
significant, hydrodynamically trapped oil accumulation. The Company encountered
42 feet of net pay in the Caballos, which is divided into two main reservoir
units; a 22 foot thick glauconitic Upper Caballos sandstone and a thick Lower
Caballos sandstone with 20 feet of net pay and a clear oil-water contact.
Average log porosity in both zones is 12%. The two reservoir units are separated
by a 14 foot sealing mudstone. The production tests conducted in the Caballos
are summarized below:
Caballos Production Test Results(1)
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Total
Peak Oil Total Oil Fluid Ending
Interval Length Rate Produced Produced BSW
Zone (feet) of Test (bopd) (bbls) (bbls) (%) API
----------------------------------------------------------------------------
Upper 10,460-10,480 141 hours 204 898 3,921 73% 27.3
Caballos degrees
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Lower 10,492-10,500 56 hours 101 127 834 79% 26.1
Caballos degrees
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1. Test results completed using artificial lift (jet pump).
Due to issues with cement integrity behind the five inch liner in the Caballos
reservoir zones, water production on DST and on short-term tests was
significantly higher than expected. Vertical interference tests confirm that the
issue is a result of a lack of behind-pipe isolation. The well is currently
shut-in pending receipt of official approvals to begin long-term testing. The
Company is currently evaluating options to fix the cement in order to minimize
produced water and maximize the oil production rate during long-term testing.
Villeta U Sandstone
The Villeta U has 10 feet of net pay in Coati-1. At the level of the Villeta U
(and similarly the Villeta T), the Coati-1 well is part of a large anticlinal
accumulation and is connected to two previously tested wells, Temblon-1V and
Temblon-1X. Given the production history of these older wells (steady decrease
in reservoir pressure with time) the Company believes a pressure maintenance
scheme is required in order to deliver economic production from the Villeta U in
Coati-1. The Company is initiating a project to evaluate options to deliver
sustainable commercial flows from both the Villeta U and the Villeta T, which
share similar reservoir characteristics. The DST results are summarized below:
----------------------------------------------------------------------------
Pay Perfor-
Gross/ ated Final
Net Poro- Thick- Stim- Test
Zone (feet) sity Shows Tested ness ulation BOPD BFPD API Duration
----------------------------------------------------------------------------
Villeta U 10/8 13% Yes 1 test 10 feet None 141 142 27.2 19 hours
Sandstone deg-
rees
----------------------------------------------------------------------------
Note: DST completed using mechanical lift (swabbing). Where multiple tests
performed, only results of the final test are shown.
Caliza A Limestone
The Caliza A is a 140 foot thick lime mudstone with a fractured thickness of 55
feet. Continual live oil and wet gas shows were encountered throughout the unit
while drilling despite using 12.5 pounds per gallon mud to control overpressure
conditions. The unit was both acidized and hydraulically fractured, followed by
DST's over multiple intervals using a jet pump. The test results indicate that
these stimulation treatments in this vertical wellbore were unsuccessful in
connecting the artificial hydraulically-generated fractures into the existing
fracture network. Management believes the well results suggest that the Caliza A
contains a potentially large resource which could be exploited by drilling of
horizontal wells and completed using multistage hydraulic fracture treatments.
Forward Plans
Independent of the well remediation work and pending long-term test approvals at
Coati-1, the Company has begun the licensing process to drill additional
locations across the Coati-Temblon field and acquire 3D seismic across the
accumulation. Future drilling and seismic activity will be subject to the
Company's evaluation of the commerciality of the well based on long-term test
results in the Caballos.
As previously reported, the Nasua prospect, a conventional anticlinal structural
target located 10 kilometers to the Northwest of the Coati-1 well, has been
partially de-risked by the results at Coati-1 due to the verification of the
hydrodynamic trapping model in the Caballos, the principal reservoir target at
Nasua. The Company is currently contemplating drilling Nasua-1 without
additional seismic and is actively licensing the area around Nasua-1 for
drilling with the expectation of drilling the structure in late 2014, subject to
issuance of environmental permits.
Platino currently holds a 100% working interest in the Coati Block, with such
interest expected to be reduced to 80% once its partner, Canacol Energy Ltd.
("Canacol"), earns a 20% interest pursuant to agreed farm-in terms and subject
to Agencia Nacional de Hidrocarburos ("ANH") approval. Platino's interest in the
Coati Block is a result of the spin-off of certain exploration assets formerly
belonging to C&C Energia Ltd. to Platino. The ANH has been informed of the
spin-off and is currently reviewing.
2013 Capital Outlook and Financial Liquidity
As a result of licensing delays at the Putumayo-8 block and the conversion of
the Company's working interest in the Morpho block to a royalty, the Company
expects capital spending to be limited to the Coati block for the remainder of
2013. A summary of estimated spending for the remainder of 2013 is presented
below. Based on current cash and cash equivalents (including short-term
investments) and activities projected for the remainder of 2013, and assuming no
further unbudgeted expenses or payment obligations, the Company estimates it
will exit 2013 with approximately US$55 million (or US$0.80 per undiluted common
share) in available funds.
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(US$ millions) H1 2013A H2 2013E 2013E
-----------------------------------------------------------------
Civil & HSEC 2.6 - 2.6
-----------------------------------------------------------------
Drilling 3.2 2.3 5.5
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Completion & initial testing - 4.8 4.8
-----------------------------------------------------------------
Well interventions - 1.4 1.4
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Other 0.9 3.5 4.4
-----------------------------------------------------------------
Total Capital Investments 6.7 12.0 18.7
-----------------------------------------------------------------
General and administrative(2) 2.6 3.0 5.6
-----------------------------------------------------------------
Total 9.3 15.0 24.3
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2. Includes acquisition related costs of approximately $0.2 million.
About Platino Energy
Platino is a Calgary, Alberta headquartered resource company engaged in the
exploration for, and the acquisition, development and production of hydrocarbons
in Colombia.
For further information please refer to Platino's website at www.platinoenergy.com.
Advisory Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of
applicable securities laws. The use of any of the words "will", "plans",
"expects", "estimates", "believes" and similar expressions is intended to
identify forward-looking information concerning the Company's future operations
and performance, including the future exploration, maintenance and drilling
plans for the Coati Block and the timing thereof; the potential for commercial
production of oil from the Company's Coati Block, including from the Caliza A;
the plans with respect to the drilling of the Nasua-1 well; the Company's
outlook with respect to operating costs through the end of 2013; the Company's
expected cash position at the end of 2013; and the operatorship of the Coati
Block.
The forward-looking information in this news release is based on certain key
expectations and assumptions made by Platino, including assumptions as to: the
timing and progress of work relating to Platino's Coati-1 well and the Coati
Block; Platino's geological and engineering estimates; taxes; the geography of
the areas in which Platino will conduct exploration and development activities;
assumptions regarding operating costs of the Company through the end of 2013;
assumptions that no other significant unbudgeted costs will arise affecting the
Company's year-end cash position; assumptions that no further common shares will
be issued in 2013; the sufficiency of budgeted capital expenditures in carrying
out planned activities; the accuracy of testing results and seismic data; the
receipt of regulatory approval for the transfer of operatorship of the Coati
Block; the ability of Canacol to earn its 20% interest in the Coati Block
pursuant to agreed farm-in terms; and the accuracy of resource estimates and the
general continuance of current or, where applicable, assumed operational,
regulatory and industry conditions. Although Platino believes that the
expectations and assumptions on which such forward-looking information is based
are reasonable, undue reliance should not be placed on the forward-looking
information because Platino can give no assurance that it will prove to be
correct.
The forward-looking information in this news release is subject to known and
unknown risks and uncertainties and other factors which may cause actual results
to differ materially from those expressed or implied in the forward-looking
information. Such risks, uncertainties and factors include, among others: risks
that the Company will face unbudgeted expenses or payment obligations that would
affect its year-end cash position; risks that the Company will have more common
shares outstanding at the end of 2013 affecting the per share cash position of
the Company at year end; the inability to secure necessary regulatory or other
third party approvals; the nature of the exploration and development activities
on Platino's assets; risks that actual operating and capital costs will be
greater than expected; risks as to the ability of the Company's industry
partners to satisfy their obligations under their agreements with the Company;
and risks related to the ability of the Company to adequately repair the cement
job of the Coati-1 well in the Caballos formation, as well as other difficulties
encountered during the exploration for, delineation, development and production
of oil. As a result of the foregoing, readers should not place undue reliance on
the forward-looking information contained in this news release. Readers are
cautioned that the foregoing list of factors is not exhaustive. Additional
information on these and other factors that could affect the operations or
financial results of Platino are included in the Listing Application (Form 2B)
of Platino filed with the TSXV, which has been filed with applicable securities
regulatory authorities and may be accessed through the SEDAR website
www.sedar.com.
The forward-looking information contained in this news release is made as of the
date hereof and Platino undertakes no obligation to update publicly or revise
any forward-looking information, whether as a result of new information, future
events or otherwise, unless so required by applicable securities laws.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT
TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
FOR FURTHER INFORMATION PLEASE CONTACT:
Platino Energy Corp. - Bogota
Tomas Villamil
President & Chief Executive Officer
+57(1) 235-0007
Platino Energy Corp. - Calgary
Tyler Rimbey
Vice President, Business Development
+1 (403) 262-6046
www.platinoenergy.com
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