Paraguay

CDS Oil & Gas Group PLC, London, plans to farm out its Gabino Mendoza and Boqueron blocks in the Chaco basin after its first well failed to meet expectations.

Feb. 28, 2006

By OGJ editors

HOUSTON, Feb. 28 -- CDS Oil & Gas Group PLC, London, plans to farm out its Gabino Mendoza and Boqueron blocks in the Chaco basin after its first well failed to meet expectations.

The CDS-GM-05-5001 well, which fulfilled the company's Gabino Mendoza work obligation, went to TD 1,635 m and found liquid hydrocarbons in several zones (OGJ Online, Dec. 27, 2005). However, reservoir quality is too poor for the liquids to flow oil unassisted. Mobilization delays caused a $1.4 million cost overrun.

Several companies have expressed interest in taking a farmout.

The company will focus on shallow oil exploration around the Emilia well on the Boqueron Block. It also believes the Gabino Mendoza Block to be gas prospective at 2,600 m.