Echo Energy, the Latin American-focused upstream oil and gas company, is pleased to announce that following the completion of drilling operations at the Company's Campo La Mata x-1 well ("CLM x-1") on Tapi Aike, mobilisation of the Petreven H-205 rig to the Palermo Aike production concession, in the Santa Cruz Sur assets, to drill the Campo Limite exploration well ("CLix-1001"), has now commenced. The CLix 1001 well will be operated by Roch S.A. (the "Operator") and drilling of the well will commence during the week ending 29 December 2019.
As previously announced, CLix-1001 will target the conventional Springhill reservoir on a structure located two kilometres from the Chilean border. Technical work has identified the Springhill target on 3D seismic data, characterised by a negative seismic amplitude at reservoir level. The target structure is in the same fault block and up dip of a well which has historically tested and produced gas from the Springhill reservoir.
The CLix-1001 well will be drilled to a total measured depth ("TD") of approximately 2,300 metres and a full suite of wireline logging tests will be conducted over the conventional Springhill reservoir which is expected to be encountered at a true vertical depth ("TVD") of approximately 2,150 metres.
Operator volumes for gross (100% basis) gas initially in place (GIIP) for the Campo Limite area are 48.9 bcf (P50 mid case), with a Pmean volume of 68.5 bcf. Given the conventional nature of the Springhill reservoir, the Operator estimates a recovery factor of approximately 70%. The Operator's estimated geological Chance of Success (CoS), based on analyses of other wells in the area, is 70%, with the identified risks being reservoir presence and deliverability.
The well has the potential to successfully de-risk further appraisal and development targets in the Campo Limite area. The presence of additional gas resources will provide enhanced commercial development scenarios for existing discovered volumes.
As previously announced, the costs of the CLix-1001 well that correspond to Echo's interest will be paid for by Petrolera El Trebol SA, a subsidiary of Phoenix Global Resources plc, the previous owner of the interest. Echo will reimburse up to 60% of these costs at a later date in a mixture of cash and ordinary shares. Total reimbursement will not exceed a maximum amount of US$1.1 million.
Martin Hull, Echo's Chief Executive, commented:
"The coming weeks represent a very exciting period for Echo as we drill CLix-1001 and move to begin the testing of the recently drilled CLM x-1 well in the Tapi Aike concession, following the previously announced encouraging initial data. 2020 will also be an extremely active year for the Company as we finalise well locations and continue our exploration campaign in Tapi Aike, and plan and execute our pursuit of the identified additional upside in the Santa Cruz Sur portfolio."