MercoPress. South Atlantic News Agency

Canadian oil company begins exploration drilling in Patagonia’s San Jorge basin

The area still has producing wells which were started in the sixties

Canada’s Crown Point Ventures Ltd announced that in early to mid July it expects to be commencing the drilling of a three well exploration drilling program at El Valle in the San Jorge basin of Argentine Patagonia.

These wells are being drilled to evaluate light oil opportunities in the Caleta Olivia and Cañadon Seco formations, which are both commercially productive in the El Valle Field.

Crown Point is drilling these wells pursuant to a farm-in agreement on 15,814 acres on the southern flank of the San Jorge basin. Drilling in the El Valle field commenced during the early 1960's with approximately 30 producing wells being drilled in the field.

During their productive life these wells they have an average cumulative production of 250,000 bbls of crude oil from the Caleta Olivia and 125,000 bbls from Cañadon Seco formations.

Pursuant to Crown Points' farm-in agreement, the Company undertook a 90 Sq. Km. 3-D seismic program and committed to the drilling of three wells. By drilling, completing and equipping or abandoning the three earning wells, Crown Point will earn a 70% interest in the production from the earning wells prior to payout and a 50% interest thereafter.

The Company will also earn a 50% interest in the balance of the field (excluding the current producing wells). Crown Point will have the right under joint venture agreements (50% interest in incremental production) to re-enter, re-complete or work over any existing well on the property.

Crown Points' technical team has developed a plan to exploit the upside of the El Valle block through a combination of exploitation drilling, work-overs of existing wells and the drilling of additional exploration targets already identified by Crown Points' 3-D seismic program.

Crown Points' President and CEO, Murray D. McCartney, stated, “We are eagerly anticipating the results from these wells, we regard the El Valle field as highly prospective for light oil production and reserve additions, this field has a history of delivering quality reserves and production”.