CALGARY, ALBERTA--(Marketwire - July 10, 2012) - C&C Energia Ltd. ("C&C" or the "Corporation") (TSX:CZE) is pleased to provide an operations update on its current activities in Colombia.
The company continues to add shareholder value by consistently delivering production growth and finding new commercial accumulations of oil through exploratory and development drilling.
Production in June averaged approximately 11,270 barrels of oil per day ("bopd") bringing average production rates for the second quarter 2012 and year-to-date 2012 to approximately 10,500 bopd and 10,450 respectively. Current production levels are approximately 11,500 bopd. Year-to-date average production of approximately 10,500 bopd represents a year-on-year increase of 52% versus the first half of 2011. The performance increase is primarily attributable to the Zopilote development drilling program and the Saimiri discovery on the Cravoviejo Block as well as several well work-overs providing lift optimization and sand control. Production forecast average for the full year remains unchanged at 10,500 bopd versus average production for 2011 of 8,400 bopd.
On the Cravoviejo block (100% working interest), the Corporation continues to develop the Zopilote field. Zopilote was one of the most significant light oil discoveries in Colombia in 2011. To date, C&C has drilled a total of 7 wells at Zopilote bringing total production capability to over 4,000 bopd. The previously announced Zopilote-11 development well reached a total depth of 9,131 feet and was cased. Zopilote-11 has now been tested and completed in both the Gacheta and C5 Formations. The Gacheta was swab tested at 490 bopd with a 5% water cut and the C5 tested on natural flow 340 bopd at a 0.2% water cut. The well has been placed on production from the Gacheta formation and tied into the Bastidas facilities. The well is currently undergoing a remedial gravel pack operation from which it will be returned to production.
On the Cachicamo block (100% working interest) the long-term contracted Caroil-16 drilling rig has been moved on to the block where it will drill at least 5 more exploratory wells over the remainder of 2012. With the acquisition in May 2011 of Ramshorn's 70% working interest and taking over operatorship of the Cachicamo block, C&C elected to defer drilling operations in Cachicamo until 2012. Over the last year, the Corporation has shot additional 3D seismic and reprocessed prior 3D seismic to define and high-grade drilling locations for its 2012 drilling campaign. As a result, the first of a series of exploratory wells has been drilled and tested. C&C is pleased to announce the discovery of the Greta Oto field in the northwestern area of the Cachicamo block. The well was drilled to a total depth of 8,670 feet and encountered 10 feet of pay in the C5 formation. Greta Oto-1 was perforated and produced 730 bopd of 26°API oil with no water on an 18/64 inch choke on natural flow. The well is now being readied with permanent production equipment and will be placed online. C&C is currently analyzing seismic data and will monitor production to determine a follow-up appraisal drilling location, which could be drilled prior to year-end.
The Monarca-1 exploration well, also located in the northern western part of the Cachicamo block was spud on July 4, 2012 and is targeting the C5 formation. The well is anticipated to reach total depth and be tested in the early part of August.
On the Llanos-19 block (100% working interest), the previously announced Tormento-1 well was drilled to a total measured depth of 15,166 feet and has been completed successfully in the Gacheta and Mirador Formations. The well initially tested oil at rates from the Gacheta and Mirador formations of 700 bopd with a 0.1% water cut and 670 bopd with a 0.4% water cut respectively. Long-term testing on the Mirador formation will commence the week of July 9, 2012 and results of the long-term test, together with the initial Gacheta test results, will be used to determine the follow on appraisal drilling program. Tormento-1 is a significant dual zone discovery in a new area for C&C providing for an extensive appraisal and development program in 2012.
In the Putumayo-8 block (50% working interest) the topography for the acquisition of the 95 km2 3D seismic survey continues. An exploratory well is planned on this block for late in the fourth quarter 2012 or first quarter 2013, pending seismic processing results and receipt of drilling permits. The Putumayo-8 block is immediately adjacent to the Platanillo field, with a recently announced significant oil discovery.
Inventory levels at the end of June increased approximately 75,000 barrels from March 31, 2012 as a result of reduced export volumes during the month of June. The Corporation continues to manage its sales options to reduce future inventory levels.
The Carrizales to Araguaney oil transport pipeline continues to progress on schedule. Pipeline routing has been determined and the necessary pre-application work continues on the engineering and environmental fronts.
ABOUT C&C ENERGIA LTD.
The Corporation, through its subsidiary Grupo C&C Energia (Barbados) Ltd., is engaged in the exploration for and the development and production of oil resources in Colombia. Its strategy is to develop producing oil assets by appraising and developing existing discoveries and exploring in areas assessed by management to be of moderate risk. With a total of eight blocks (seven operated) and approximately 597,000 acres (478,000 net acres) in Colombia, the Corporation's management expects that C&C Energia has considerable upside for future production and reserve growth.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This press release contains forward-looking information within the meaning of applicable Canadian securities laws that involves known and unknown risks and uncertainties. Forward-looking information typically contains statements with words such as "anticipate", "estimate", "expect", "potential", "could", "will", "plans" or similar words suggesting future outcomes. The Corporation cautions readers and prospective investors in the Corporation's securities to not place undue reliance on forward-looking information as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by C&C.
Forward-looking information in this press release includes, but is not limited to, information concerning the expectations of the Corporation with respect to the Corporation's future production for the second quarter of 2012 and for 2012 as a whole and the Corporation's drilling plans in each of the Cravoviejo, Cachicamo and Putumayo block. These forward-looking statements are subject to assumptions regarding the Corporation's operations and the operating environment in Colombia. In particular, estimates of production for the second quarter of 2012 and for 2012 as a whole, estimates of inventory levels, estimates of future cost savings and the Corporation's expected drilling plans are based on the assumptions that the Corporation's plans will be completed without any undue difficulty, that costs will not rise significantly and that events will not cause disruptions in the delivery of the Corporation's oil production to market. The Corporation's capital program and drilling are subject to change if circumstances change or if management of the Corporation determines that other business plans are more appropriate.
Forward-looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated by C&C including, but not limited to, general risks associated with the oil and gas industry (e.g. operational risks in exploration; inherent uncertainties in interpreting geological data; changes in plans with respect to exploration or capital expenditures; the uncertainty of estimates and projections in relation to costs and expenses and health, safety and environmental risks, potential risks arising from trucking and other delivery disruptions), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with the negotiating with the ANH or with other third parties in countries other than Canada and the risk associated with international activity. The forward-looking information included in this news release is expressly qualified in its entirety by this cautionary statement. The forward-looking information included herein is made as of the date hereof and C&C assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by law.