By OGJ editors
HOUSTON, Mar. 7 -- GeoPark Holdings Ltd. is reestablishing gas production at the Fell Block in Chile's Tierra del Fuego region and plans to sign a long-term gas supply contract to supply the nearby Methanex Corp. methanol plant at Punta Arenas.
The two companies signed a memorandum of understanding under which GeoPark would supply gas for 10 years starting in May. The agreement provides incentives for volume growth up to 100 MMcfd of gas and includes provisions for the financing of development operations and the potential joint acquisition of new hydrocarbon blocks in Chile.
GeoPark began operating the Fell Block in September 2005 and began producing from the block in May 2006 from Molino, Ovejero, and Nika fields. It reactivated the first well in Santiago Norte field in December 2006 at 3.2 MMcfd and 50 b/d of condensate and recently completed an $8 million 3D seismic program on the Fell Block.
Gas is piped to Methanex, and Chile's state ENAP buys the condensate.
GeoPark was also reworking four wells in Monte Aymond field to begin producing in the first quarter and has a drilling rig under contract for 3 years with a 2-year extension option.
