Alvopetro Energy Ltd. is pleased to announce that our 197(2) well, located on Block 197 in the Reconcavo basin in the State of Bahia, Brazil, has discovered natural gas. The 197(2) well reached a total depth of 1,669 metres and has been cased and cemented. Based on cased-hole sonic and neutron logs, the 197(2) well encountered 78 metres of potential net natural gas pay, with an average 33% water saturation, and an average porosity of 12%, using an 8% porosity cut-off.
The 197(2) well offsets an existing discovery that has 67 metres of net pay. This offsetting well tested 3.6 mmcf/d and 21 bbls/d of condensate from a 4-metre perforated interval in the Caruacu Member of the Maracangalha Formation, over a final 16-hour flow period, with a 32/64″ choke and 1,267 psi flowing sand-face pressure. The operator of this offsetting well has submitted a delineation plan to the ANP.
Based on these results, and consistent with our natural gas commercialization objectives, we plan to commence a testing program on the 197(2) well with a service rig in early 2015, subject to customary regulatory approvals and equipment availability. Additional technical work and testing is required to determine the extent, if any, of potential commercial hydrocarbons associated with the 197(2) well.
This successful result is a significant milestone for a natural gas business in Bahia and supports our additional natural gas exploration prospects and our broader plans to develop the extensive Gomo natural gas potential we have discovered in our 197(1) and 183(1) wells drilled earlier this year.
Our 197(2) discovery is our second discovery on Block 197. Our 197(1) well was drilled to a total depth of 3,275 metres and encountered 43 metres of potential net hydrocarbon pay over several separate intervals. The lowermost 6 metres of net pay was perforated and flowed natural gas, without stimulation, at a rate of 40 mcf/day, with no water. This gas interval is part of a large geobody that we have mapped using 3D seismic over a large area, confirmed by our 183(1) well results. Based on logs, mapping and ongoing technical analysis, we internally estimate 1.3 TCF of total petroleum initially-in-place (“TPIIP”) (natural gas) in this 5,460 acre geobody. We plan to complete and test the 183(1) well in early 2015.
We recently completed workovers of two wells in our Jiribatuba field. Our Jiribatuba(9) well is in the process of being optimized, and our Jiribatuba(1) well is now producing 34 bbls/d of 35.9 degree API crude. Based on field estimates, Alvopetro’s current total company production is 65 bbls/d.
Alvopetro’s focus in 2015 will be building a sustainable base of production and cash flow through lower risk, oil-focused development and exploration drilling. Our financial resources enable Alvopetro to accomplish our 2015 capital plan with cash on hand. We plan to commence development drilling on our Bom Lugar mature oil field in the first half of 2015.
Alvopetro Energy Ltd.’s vision is to be the premier independent exploration and production company in Brazil, maximizing shareholder value by being the lowest cost operator and applying innovation to underexploited opportunities. Alvopetro aims to implement a large-scale, repeatable, low-risk, multi-well development program, utilizing advanced technology and completion techniques. Alvopetro’s strong financial position, along with our experienced team of professionals, local operating capabilities and highly prospective land base, will enable us to efficiently develop our resource play opportunities.
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www.alvopetro.com
