A group led by operator Roch SA plans a multiwall, multiyear drilling program on the Las Violetas exploitation concession in southern Argentina’s Tierra del Fuego Province.
The partners are reviewing rig options and negotiating to obtain and import a drilling rig to Tierra del Fuego to begin work in the fourth quarter, said Calgary-based Crown Point Energy Inc., which owns a 25.78% interest in the Las Violetas block.
An initial eight-well is part of a larger campaign to exploit the predominantly gas-charged Cretaceous Springhill sandstones on several concessions, Las Violetas in particular.
The initial eight-well phase on Las Violetas is a low-risk development program. Drilling and casing time including rig up and rig down is expected to be 20 days/well, and completion and tie-in will take a further 30 days. The drillsites are fully defined with 3D seismic and are either infill locations or low-risk pool stepouts.
The partners also have identified a number of high reward exploration and exploitation locations on Las Violetas, and if any future drilling activities at these locations is successful, it could further add to the present drilling inventory.
Any production increases likely will qualify for improved gas pricing under the New Gas Incentive Program announced by the Argentine government in January. Crown Point has applied for participation in the program, and the Argentine government has extended the negotiation period until Aug. 15.
The Roch-led group has received all necessary governmental approvals for 10-year extensions of the Las Violetas, Rio Cullen, and Angostura exploitation concessions.
Las Violetas carries a $46.9 million, 18-well minimum concession life total development investment commitment, a $5 million, 60-month minimum total exploration investment commitment.
Rio Cullen and Angostura commitments are $3.3 million and $3.8 million, respectively, which in both cases include seismic and drilling, to be expended over 24 months.