Petro Vista farms out 30% of Colombian block
Petro Vista Energy's wholly owned Colombian subsidiary Petropuli has signed a farm-out agreement with Omega Energy Colombia and Green Power for interests in the Morichito block in Colombia.
Oil Diplomacy Editor
LOS ANGELES, Jan. 19 -- Petro Vista Energy Corp.'s wholly owned Colombian subsidiary Petropuli Ltda. has signed a farm-out agreement with Omega Energy Colombia and Green Power Corp. for interests in the Morichito block in Colombia's Llanos basin.
Petro Vista will farm-out an aggregate 30% participating interest in its 100% owned Morichito block for a combination of cash and drilling commitments.
The two Colombian firms will pay $500,000 cash on or before Jan. 23; 100% of the costs of the drilling and completion of the Morichito No. 2 exploration well; 100% of the next $2.1 million of exploration costs of the Morichito No. 1N exploration well; and 30% of all ongoing costs.
Petro Vista has secured a rig and plans to complete the Morichito No. 2 well beginning this month, while the Morichito No. 1N prospect exploration well is being planned for first-quarter 2009. The second exploration well, Morichito No. 3, will follow once Morichito No. 1N is completed.
Petro Vista said the agreement, valued at $4.4 million, is subject to all necessary approvals, including approval by Agencia Nacional do Hidrocarburos (ANH) and the TSX Venture Exchange, and to completion of due diligence by the two Colombian firms.
Extensive geotechnical analysis—3D seismic reprocessing and well log evaluations—and engineering analysis has been completed on five exploration prospects in the Morichito block, Petro Vista said.
Oil production up
The announcement coincided with reports that Colombia's crude oil output averaged 588,000 b/d in 2008, up about 10% over the 531,000 b/d produced in 2007, according to ANH data.
Colombia expects oil output of 650,000-700,000 b/d in 2009, a roughly 10% increase over last year's production of 588,000 b/d.
ANH director Armando Zamora last week told Colombia's financial daily Portafolio that the country's increased production in 2009 "will not be due to a great discovery but from the many small fields that are beginning to show results."
Alejandro Martinez, president of the Colombian Petroleum Association, a group
comprised of private oil and gas companies, said the current level of investment is very high and that no sharp decrease is expected as contracts have already been signed.
"I think the trend toward more new wells and more development, as well as toward increased production, will continue, but in the long term we need to be attentive," he said, adding that price will determine how much companies invest.
Contact Eric Watkins at email@example.com.