Parex Resources Inc. ("Parex" or the "Company") (TSX: PXT), a company headquartered in Calgary, Alberta and focused on Colombian oil exploration and production, provides an operational update.
Production: Q1 2017 production was approximately 32,600 barrels of oil equivalent ("boe/d") (99% crude oil), an increase of 5% from 31,049 boe/d in the prior quarter. For Q2 2017, we expect production to average 34,000 boe/d for an overall increase of approximately 10% for the first half of the year.
Cabrestero (working interest ("WI") 100%): The Bacano-3 exploration well has been drilled to a total depth of 12,160 feet to appraise the continuity of the Guadalupe reservoir, following the exploration success of Bacano-2 and Jacana-11 on the adjacent Block LLA-34. Bacano-3 is located 1.5 kilometers south of the Jacana-11 oil well and 1.6 kilometers northwest of the Bacano-2 oil well.
The Bacano-3 well encountered good quality Guadalupe sandstones and the well was completed and tested with the drilling rig. An Electric Submersible Pump ("ESP") was installed in the well and testing commenced on April 3, 2017. As of April 6, 2017, a total of 5,648 barrels of 17 API oil has been recovered over a 73 hour period for an average production rate of 1,857 barrels of oil per day ("bopd"). Bottom hole pressure recorders indicate a producing drawdown of approximately 35% at the current production rate of 2,070 bopd and a final watercut of under 1%. After the 7 day short-term test, the well will be shut in for pressure buildup analysis. The drilling rig was skidded on the same pad and has spud the Bacano-4 appraisal well with a bottom-hole location approximately 300 meters southeast of the Bacano-2 location. Bacano-2 was completed in the upper zone of 3 potential oil zones and was producing at a stable rate of approximately 580 bopd before being shut-in for pressure build-up. The Bacano-4 well will be cored and will be used to appraise the Guadalupe reservoir distribution and quality on the Cabrestero Block.
Playon (WI 50%): The Boranda-1 exploration well, located in the Middle Magdalena Basin, was drilled to a total depth of 12,173 feet to appraise the La Paz Formation. The initial completion was undertaken in November 2016 when the entire La Paz Formation was tested resulting in high water rates with traces of oil. Due to the inconclusive test results, selective completions were performed and the well was equipped with a rod pump system. Testing commenced on March 14, 2017 and over a 20-day period a total of 1,832 barrels ("bbls") of 21 API oil has been recovered for an average rate of 94 bopd. The measured watercut from the well has been decreasing throughout the test from approximately 30% initially to the current rate of 23%. Fluid level measurements indicate the well is producing at approximately 90% drawdown.
The testing results from Boranda-1 along with the information from a vertical seismic profile ("VSP") of the well will be integrated to determine the potential location of the Boranda-2 appraisal well which is expected to be drilled in 2017, subject to partner approval.
Aguas Blancas (WI 50%): Parex continues to advance its assessment of the Aguas Blancas field. To date in 2017, we have drilled 5 wells of the planned 2017 10-15 well drilling program. A service rig has been mobilized from the Boranda-1 well to begin completion and testing of the 5 drilled wells on the AB-3 pad to be followed by completion and testing of the wells on the AB-5 pad. After the wells on both pads have been tested, we expect to commence two water-flood pilots. Parex expects to begin civil works for two new pads early in the second half of 2017.
Llanos 34 (WI 55%): Parex continues to delineate the Jacana/Tigana trend. Jacana-7, Jacana-8 and Jacana Sur-2 have been drilled and will be tested shortly with a service rig. In addition, an appraisal well Jacana Sur-1 is currently drilling.
Over the next month, we plan to spud two exploration wells that will evaluate fault trends that run parallel to the Tigana/Jacana trend. The Sinsonte exploration prospect is west of Jacana and the Jacamar exploration prospect is east of the Jacana field.
Upcoming News Events: We look forward to releasing our Q1 2017 unaudited financial results on May 10, 2017 and holding our Annual General Meeting ("AGM") on May 11, 2017.
The AGM will be held at 9:30 a.m. (Calgary Time) at the Conference Centre on the 4th floor of Eighth Avenue Place East Tower, 525 - 8th Avenue S.W., Calgary, AB T2P 1G1.
Parex is committed to a strong balance sheet that provides financial flexibility. The Company funds its capital programs primarily with cash flow generated from operations, thereby creating a sustainable business model for growth. Our properties are focused in Colombia, where the Company holds a significant land base of 2.10 million gross acres.
SOURCE: Parex Resources Inc.
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