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GeoPark-LGI presses search in Chile's Magallanes

Chile’s Tierra del Fuego oil and gas producing area advanced in 2011 as GeoPark Holdings Ltd. declared commerciality on most of the Fell block, where it drilled 25 wells, launched a partnership with LG International, and expanded its acreage position.

GeoPark built Fell block production to 9,400 b/d of oil equivalent, 45% crude oil and condensate, in December compared with an expected average of 7,600 boe/d for 2011.

The first exploratory well on the 1.6 million acre Tranquilo block, Renoval-X1, is under completion with three zones in the Morro Chico formation to be fractured and tested. Total depth is 2,950 m.

The Punta Delgada Norte-4 well on the Fell block was completed in October 2011 as a Cretaceous Springhill discovery and is averaging 2 MMcfd of gas to Methanex. The well also indicated shallow Tertiary production potential.

The Yagan Norte-3 appraisal well on the Fell block is making 400 b/d of oil from the Jurassic Tobifera, a volcanic clastic formation underlying the Springhill. The well also appears to have Springhill potential. GeoPark is sidetracking the previously drilled Yagan Norte-2 well to the Tobifera.

The Copihue-2 appraisal well is a Springhill producer at 130 b/d of oil and 1.6 MMcfd of gas, and Copihue-3 is being drilled.

GeoPark drilled five new wells to increase Springhill oil production in Guanaco field and studied the feasibility of waterflooding that field.

After the Fell block exploration period expired in August 2011, GeoPark declared and obtained commerciality over 84% of the original 440,000 acres. A further expiration is set for 2032. GeoPark then sold a 10% interest in its Chilean upstream business to LGI for $78 million, bringing LGI’s stake to 20%.

GeoPark committed to spend more than $100 million in the next 3 years exploring the Isla Norte, Flamenco, and Campanario blocks that cover more than 400,000 acres geologically contiguous to the Fell block. Subject to regulatory approval, it plans to start seismic in the first quarter of 2012 and drilling in the fourth quarter.

GeoPark also initiated a review of the oil and gas shale potential of its acreage in Chile and in Argentina, where it has two blocks in the Neuquen basin with the Vaca Muerta shale opportunity. In Chile, the Cretaceous Estratos con Favrella shale underlies GeoPark’s extensive Magellan basin acreage.

The GeoPark-LGI partnership is reviewing a range of asset and corporate opportunities in Chile, Colombia, Peru, Brazil, and Argentina. Holdings total 4 million gross acres in Chile and Argentina.


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