TIDMAEN
RNS Number : 0808I
Andes Energia PLC
25 August 2016
25 August 2016
Andes Energia plc
("Andes" or "the Company")
Chachahuen Exploration Operational Update
New exploration success in Chachahuen block
The Board of Andes (AIM: AEN; BCBA: AEN), the producer and
explorer in Argentina and Colombia, is pleased to provide an update
on current exploration operations in the Chachahuen block in the
Province of Mendoza, Argentina, based on drilling and completion
reports, provided by YPF, the operator on this block.
Highlights:
-- Four exploratory wells were drilled and completed
-- An oil discovery was made in exploration well "Cerro Redondo
x-1" encountering 6 metres of net oil pay in the sandstone of the
Rayoso formation (cycle 1)
-- Gas was found in exploration well "La Orilla x-1" in the
deeper horizon of the Lotena formation
-- Gas was found in the exploration well "Remanso del Colorado
x-1" in the deeper horizon of the Cuyo Group
-- Well "Cerro Montoso x-1" was plugged and abandoned providing
valuable geological and engineering data for the on going
exploratory campaign
-- A fifth well "Cerro Morado Este x-1" was spudded on 5 July
and is currently in the completion stage, with the main target to
investigate the Centenario formation
The discoveries from the exploration program will add new
potential resources for future development in the field.
Exploratory Activities
La Orilla x-1
The well is located approximately 17 km southeast of the first
discovery well "Chus x-2", on the "Chachahuen Sur" evaluation block
and was drilled to test a four-way closure structure at multiple
horizons investigating the complete stratigraphic column, with the
primary target the Centenario formation and the deeper Tordillo and
Lotena formations the secondary targets. The Centenario formation
occupies the eastern margin of the Neuquén Basin. The facies of
this formation is fluvial/lacustrine, typical of the basin margin
and these non-marine deposits interfinger with the marine
formations of the upper part of the Mendoza Cycle and with the
evaporitic facies of the Rayoso Cycle.
The well reached a total depth of 1,353 metres and encountered
oil and gas shows in the lower Centenario, Tordillo and Lotena
formations. During the completion stage, the deeper horizon of the
Lotena formation (depth 1,266 metres) tested for intermittent
natural flows of gas and water, with the gas flared at the
location. A production string was installed in order to perform
extended well tests to define productivity.
Cerro Montoso x-1
The well is located approximately 37 km northeast of the
discovery well "Chus x-2", on the "Chachahuen Centro" block and was
drilled to test a three way closure against a bounding fault
structure at multiple horizons with the primary target the lower
Centenario formation and the deeper Tordillo formation the
secondary target.
The well was drilled to a total depth of 980 metres. Lost
circulation was encountered whilst drilling and no oil shows were
seen. The well was cased and formation water was recovered from the
Centenario and Tordillo formations through swabbing. The well was
subsequently plugged and abandoned.
Remanso del Colorado x-1
The well is situated approximately 9.5 km southeast of the
discovery well "Chus x-2" on the "Chachahuen Sur" evaluation block
with the primary target to investigate the sandstone of cycle 1 of
the Rayoso formation into the combined structural/stratigraphic
traps where the updip seal is the claystones of the Neuquen Group
above an unconformity.
The well was drilled to a total depth of 2,418 metres
investigating the complete stratigraphic column. A comprehensive
well test program was carried out testing separately the following
formations: Rayoso, Agrio, Mulichinco, and an intrusive of the Vaca
formation. Formation water was recovered from each one, whilst the
deeper horizon of the Group Cuyo formation tested for natural flows
of gas and water with the gas flared at the location. An extended
well test is planned to define productivity.
Cerro Redondo x-1
The well is situated approximately 4.3 km northeast of the
discovery well "Chus x-2" on the "Chachahuen Sur" evaluation block
with the primary target to investigate the sandstone of cycle 1 of
the Rayoso formation into the combined structural/stratigraphic
traps where the updip seal is the claystones of the Neuquen Group
above an unconformity.
The well was drilled to a total depth of 1,810 metres
investigating the complete stratigraphic column. Oil shows were
seen during the drilling process, however, wireline logs showed the
deeper horizons of the Troncoso, Agrio, Mulichinco, Quintuco/Vaca
Muerta, Tordillo and Grupo Cuyo formations to be water saturated.
The shallow horizon encountered good quality reservoir sandstone
with a net oil pay of 6 metres. The well was cased at depth of 845
metres to test the Rayoso formation. After fracture stimulation the
well produced by natural flow 135 bpd with a water cut of
approximately 15%. A buildup test was performed to further evaluate
the potential reservoir properties of cycle 1 of the Rayoso
formation.
The well came on stream on 27 June and after an initial clean up
period produced at a rate of 81 bpd.
An appraisal program and extensive follow-up exploration
activities will now be considered targeting cycle 1 of the Rayoso
formation.
Nicolas Mallo Huergo, Chairman, commented: "The new oil
discovery at the "CoRe x-1", untapped a new reservoir to be
appraised and developed, in the same way the presence of gas
identified in the deeper horizons of wells "LaO x-1"and "Re Co x-1"
opens a new exploratory frontier, which reaffirms the large scale
hydrocarbon potential of Chachahuen."
For further information please contact:
Andes Energia plc Nicolas Mallo Huergo, T: +54 11
Chairman 5530 9920
Alejandro Jotayan,
CEO
Billy Clegg, Head
of Communications
Stockdale Securities Antonio Bossi T: +44 20
David Coaten 7601 6100
Camarco Gordon Poole T: +44 20
3757 4980
Qualified Person Review
In accordance with AIM guidance for mining, oil and gas
companies, Mr. Juan Carlos Esteban has reviewed the information
contained in this announcement. Mr. Juan Carlos Esteban, an Officer
of the Group, is a petroleum engineer with over 30 years of
experience and is a member of the SPE (Society of Petroleum
Engineers).
Note to Editors:
Andes Energia plc is an oil and gas exploration and production
company focused on onshore assets in South America with a market
capitalisation of circa GBP100m. The Company has its main
operations in Argentina and Colombia.
The Company has approximately 25* MMbbls of conventional 2P
reserves, and it also has certified prospective resources of 640
MMboe, primarily in the Vaca Muerta unconventional development in
Argentina and over 7.5 million acres across South America.
The Company has approximately 250,000 net acres in the Vaca
Muerta formation, which is the second largest shale oil deposit in
the world and the only producing shale oil deposit outside of North
America, currently producing 45,000 boepd. Over 300 wells have
already been drilled and fracked in the Vaca Muerta formation.
Andes is the only AIM quoted company on the London Stock
Exchange with exposure to the Vaca Muerta shale.
The Company currently produces approximately 3,300* boepd in
Argentina and Colombia from six conventional fields in Argentina
and two in Colombia, with positive cash flows generated.
*Includes 100% of Interoil's net reserves and production
This information is provided by RNS
The company news service from the London Stock Exchange
END
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