Location and background
The La Creciente Block is located in the municipalities of Buenavista, Los Palmitos, Ovejas, San Pedro and Since in the department of Sucre, and is part of the Lower Magdalena Valley Basin. Pacific Rubiales holds a 100% participating interest in this Exploration and Production Contract originally executed by Pacific Stratus with the Colombian National Hydrocarbon Agency (ANH) in August 2004. The geology, work performed and exploration potential of La Creciente, are explained in greater detail below under "Exploration".
The exploratory well LCA-1, drilled during the last quarter of 2006, discovered a significant natural gas reservoir within Prospect "A". In 2007, three wells were drilled at a total cost of $42.7 million. Drilling was performed in tandem with the construction of gas separation and dehydration facilities and flow lines necessary to transport La Creciente's gas to the existing pipeline running from the Guepaje field to Cartagena. Construction costs equalled $18.7 million, resulting in a total investment of $61.4 million at La Creciente for the year.
Development projects during 2007 included commencing the long-term tests for the LC-1 and LC-3 wells, the aim of which was to upgrade the proved non-producing reserves to proved producing reserves and to commence production and capital recovery. Production at La Creciente commenced in January 2008 and currently averages 35 MMcf/d. It is expected that production will reach 60 MMcf/d by the third quarter of 2008.
Reserves and Resources
For field A, proved reserves of approximately 369.5 Bcf of natural gas and 177.4 thousand barrels of condensate were identified and certified. Probable certified reserves of 136.1 Bcf of gas and 65.3 thousand barrels of condensate were also established. Additionally, for field D proved reserves of natural gas and condensate of approximately 41.6 Bcf of gas and 17.9 thousand barrels of condensate were certified and probable reserves of approximately 9.9 Bcf of gas and4.3 thousand barrels of condensate were also certified. (Per Petrotech Engineering Ltd. as of December 31, 2007).
The company estimates that further exploration resources will be discovered at La Creciente not only within the existing producing fields "A" and "D", but also by exploring the other 6 prospects where additional drilling is planned for 2008 and 2009.
