GeoPark Ltd. has executed a joint investment agreement and joint operating agreement with state-owned Petroleos del Peru SA (Petroperu) to acquire 75% interest in and operate the 1.9-million-acre Morona block of northern Peru. The deal is expected to close first-quarter 2015.
Petroperu will hold the remaining 25% interest with the option to increase its working interest in the block to 50%, subject to GeoPark recovering its investments in the block.
Morona block, also known as Lote 64, resides on the western side of the Maranon basin, where more than 1 billion bbl of oil have been produced from surrounding blocks within the basin.
The block includes 2D seismic covering 2,783 sq km and 3D seismic covering 465 sq km, along with an operating field camp and logistics infrastructure.
The area has been the site of oil and gas exploration activities over the past 40 years. Ongoing association agreements and cooperation projects are in place with local communities.
GeoPark’s South American presence includes operations and producing properties in Brazil, Argentina, Colombia, and Chile, the latter two of which were sites of recent oil discoveries (OGJ Online, Apr. 9, 2014; July 1, 2014).
Situche Central oil field
The Situche Central oil field in the Morona block has been delineated by two wells and 3D seismic, with short-term tests indicating 2,400 and 5,200 b/d of 35-36° gravity oil for the respective wells.
Independent reservoir engineering firm Ryder Scott has certified 2P reserves of 55 million bbl of oil and 3P reserves of 85 million bbl of oil for the field for Petroperu. GeoPark used a 2P reserve estimate of 30-40 million bbl of oil for its internal evaluation of this project.
The expected work program and development plan for Situche Central is to be completed in three stages. GeoPark’s goal in the initial stage will be to put the field into production through a long-term test to help determine the most effective overall development plan.
The initial stage will cost $140-160 million and is expected to be completed 18-24 months after closing. GeoPark has committed to carry Petroperu during the phase and has the funds and cash flow to support the program.
The subsequent work program stage will be initiated once production has been established, carrying out the full development of Situche Central, including transportation infrastructure and new exploration drilling of the block.
GeoPark says that in addition to the Situche Central field, Morona boasts large exploration potential with several high impact prospects and plays, with exploration resources currently estimated to range from 200 to 600 million bbl of oil.