MercoPress. South Atlantic News Agency

Canadian company finds crude in northeast Argentina

An oil deposit was discovered in an exploratory well in the northeast Argentina province of Formosa announced the Canadian company Gran Tierra Energy Inc. The Calgary based company said Wednesday it plans long-term production testing on the Proa.x-1 well and will begin commercial oil sales in about a week.

The company began drilling the Proa.x-1 exploration well on July 9, 2008 and reached total measured depth of 12,920 feet on August 28, 2008. Good oil shows were encountered in Cretaceous volcanics and volcaniclastics in the Palmar Largo Formation during drilling and oil saturations were indicated on logs. Gran Tierra Energy conducted a drill-stem test in the Lower Palmar Largo formation from 12,694 to 12,713 feet and obtained no flow. It then conducted a production test in the intervals 12,649 to 12,661 feet and 12,620 to 12,641 feet, and obtained a stabilized gross flow rate of 2,324 barrels of oil per day (BOPD) through a 35/64 inch choke with a water-cut of 0.5 percent. The oil gravity was 43.8 degree API at 60 degree Fahrenheit. "The Proa.x-1 test results should prove to be a substantial reserves and production addition to our Argentine business unit," Dana Coffield, president and CEO of Gran Tierra, said in a release. "This success adds near-term production and cash flow . . . in addition to increasing the prospectivity of identified leads in the Surubi Block and in the adjoining Chivil and Palmar Largo Blocks, where Gran Tierra Energy has a 100 per cent and 14 per cent working interest respectively". Recursos Energeticos Formosa SA (REFSA), the provincial government company, has 15% interest. Tierra Energy Inc. is an international oil and gas exploration and production company operating in South America, headquartered in Calgary, Canada, incorporated in the United States, and trading on the American Stock Exchange (GTE) and the Toronto Stock Exchange (GTE). The company holds interests in producing and prospective properties in Argentina, Colombia and Peru.