Petrolifera Petroleum Limited Updates Status of La Pinta 1X Testing Program
CALGARY, Feb. 22 /CNW/ - Petrolifera Petroleum Limited (PDP-TSX) announced today that upon opening the La Pinta 1X well to flow on test on February 18, 2010, following the installation of two inch screens to impede the influx of sand from the upper 25 foot interval of the Cienaga de Oro ("CDO") crude-oil bearing formation being tested in the well, the well ceased to flow after approximately three hours of flow, likely again due to sanding issues. Subsequent static gradient analysis indicated that the upper portion of the fluid influx into the tubing was hydrocarbons, with the balance likely mud or some combination thereof.
In order to attempt to secure a definitive test of the crude oil-bearing CDO, the company's management and advisors have reexamined and assessed the various available alternatives. These primarily included another more complex operation to re-test the CDO, or the drilling of a sidetrack to again penetrate and then test the full CDO interval which was indicated to be hydrocarbon-bearing and yielded light gravity crude oil on test. Drilling a sidetrack would also have afforded the company with the prospective ability to preplan the availability of enhanced sand control techniques, as a result of key learnings from efforts to date to secure a longer-term test the CDO formation in the La Pinta 1X well. Having regard to economic and financial factors, the perceived technical risk and assessment of the overall chance of success of these two choices, it was concluded that neither of these two alternatives were viable at this time.
Accordingly, a decision has been made to set a cement plug above the CDO and then to move uphole to test a zone in the Upper Porquero Formation. This zone was determined to be prospective based on log analysis and shows of crude oil and natural gas during the drilling of the well. If the Upper Porquero test is successful, efforts will be made to complete the well to evaluate its commercial potential. It should be noted under these circumstances that a new well bore would be needed to evaluate the deeper CDO. Alternatively, if testing of the Upper Porquero disappoints, we could still consider a sidetrack to penetrate and test the full CDO at a later date.
These procedures will be initiated as quickly as possible, using the snubbing unit still available and on location at the La Pinta 1X well.
While the company's management is disappointed that more meaningful data about the CDO could not be secured at this time, its potential has been established and may be further evaluated and confirmed at a later date with lower risk. In the interim, testing of the Upper Porquero is considered to be technically and financially prudent at this time.
Petrolifera Petroleum Limited is a Calgary-based crude oil, natural gas and natural gas liquids exploration, development and production company active in Argentina, Colombia and Peru in South America. It is currently drilling the Brillante SE 1X well on the Sierra Nevada License in the Lower Magdalena Basin onshore Colombia. Petrolifera's shares and share purchase warrants are listed for trading on the Toronto Stock Exchange under the symbol PDP and PDP.WT, respectively.
Forward Looking Information:
This press release contains forward looking information including, but not limited to, the company's remediation efforts and planned testing and possible completion of the Upper Porquero formation of the La Pinta 1X well in Colombia and additional procedures available to assess the CDO formation. Forward looking information is not based on historical facts but rather on Management's expectations regarding the company's future growth, results of operations, production, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, plans for and results of drilling activity, environmental matters, business prospects and opportunities and expectations with respect to general economic conditions. Such forward looking information reflects Management's current beliefs and assumptions and is based on information currently available to Management. Forward looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward looking information, including but not limited to, risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production, unavailability of or delays in receipt of required equipment, delays or changes to plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty associated with geological interpretations; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environment risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with foreign governments and third parties located in foreign jurisdictions and the risk associated with international activity. There can be no assurance that planned remediation efforts and subsequent testing of Porquero formation in the La Pinta 1X well drilled on the Sierra Nevada I License will yield commercial results. Hydrocarbon shows and results of logs do not confirm the presence of commercial hydrocarbons. Additional risks and uncertainties associated with Petrolifera's future plans are described in Petrolifera's Annual Information Form for the year ended December 31, 2008. Although the forward looking information contained herein is based upon assumptions which Management believes to be reasonable, the company cannot assure investors that actual results will be consistent with this forward looking information. This forward looking information is made as of the date hereof and the company assumes no obligation to update or revise this information to reflect new events or circumstances, except as required by law. Because of the risks, uncertainties and assumptions inherent in forward looking information, prospective investors in the company's securities should not place undue reliance on this forward looking information.
For further information: Richard A. Gusella, Executive Chairman, (403) 538-6201; Or Gary D. Wine, President and Chief Operating Officer, (403) 539-8450; Or Kristen J. Bibby, Vice President, Finance and Chief Financial Officer, (403) 539-8450, inquiries@petrolifera.ca, www.petrolifera.ca
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