ISABELANA

Colombia/Chile: GeoPark to acquire Colombia and Chile oil and gas assets

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GeoPark announced an agreement to acquire the LG International Corp (‘LGI’) interest in GeoPark’s Colombian and Chilean operations and subsidiaries.

Acquisition will increase GeoPark’s equity interest to 100% in its Colombian and Chilean businesses, which consist of multiple hydrocarbon blocks and associated oil and gas production and reserves, including the Llanos 34 block (GeoPark operated, 45% WI) in Colombia. Acquisition will streamline financial, tax, organizational and cost structures.

The acquisition price includes a fixed payment of $81 million payable at closing, plus two equal installments of $15 million each, to be paid in June 2019 and June 2020, respectively. Three contingent payments of $5 million each could be payable over the next three years, subject to certain production thresholds being exceeded. Closing of this transaction is expected by November 28, 2018.

James F. Park, Chief Executive Officer of GeoPark, said:

‘LGI has been an exceptional strategic partner for GeoPark for over eight years and we are grateful for their support and guidance, which were instrumental in the early development of our regional portfolio of assets and our tremendous growth in recent years. We have made many good friends in the LG organization and are confident that our partnership will continue to grow and lead to important new opportunities in the future. We are also pleased to be able to increase our ownership in our key operating companies, bringing more income to our bottom line.’

GeoPark announces 2019 work program and investment guidelines
GeoPark, a leading independent Latin American oil and gas explorer, operator and consolidator with operations and growth platforms in Colombia, Peru, Argentina, Brazil and Chile, has announced its work program and investment guidelines for 2019. (All figures are expressed in US Dollars).

2019 Work Program: Principles and Approach

Technical

• Maximum efficient development of the Llanos 34 block (GeoPark operated, 45% WI)
• Increase average oil and gas production by 15%
• Initiate Morona block project (GeoPark operated, 75% WI), with production in 1Q2020
• Delineate new plays, leads and prospects on existing assets

Economic

• Operate and grow within cashflow
• Grow adjusted EBITDA and operating cashflow
• Reduce costs
• Achieve maximum net present value for existing assets

Strategic

• Achieve scale
• Improve and add to core capabilities
• Strengthen SPEED and compliance culture
• Promote innovation
• Work Program Detail ($70 Brent)

Production target: 15% increase over 2018 average production (with 2019 not including approximately 1,000 bopd from the La Cuerva and Yamu blocks, which were sold in November 2018)
Capital expenditure program: $220-240 million fully funded by cashflows to be allocated as follows:

• Colombia – $85-95 million: Continue to develop and appraise the Tigana and Jacana oil fields and target new exploration prospects in the Llanos basin. The work program in Colombia includes:
• 22-24 development and appraisal wells and 2-3 exploration wells in the Llanos 34 block
• Two exploration wells in the Llanos 32 block (GeoPark non-operated, 12.5% WI)
• Construction of additional facilities to support future production growth and to optimize operating and transportation costs
• Peru – $95-105 million: Construction of early production facilities in the Morona block with the goal of putting the Situche Central light oil field into production by early 2020, subject to approval of the EIA (Environmental Impact Assessment) in 1Q2019. The
• ork program in Peru includes:
• Base camp revamping, installation of a flexible pipeline from an existing well to the base camp, civil works, access road, treatment facilities and wireline intervention activities
• Argentina – $20-25 million: Develop and explore oil and gas targets in the Neuquen basin. The work program in Argentina includes:
• Two exploration wells, two tight gas development wells and waterflooding project in the Aguada Baguales, El Porvenir and Puesto Touquet blocks (GeoPark operated, 100% WI)
• Seismic studies in Los Parlamentos block (GeoPark non-operated, 50% WI)
• Chile – $17-20 million: Develop and explore oil and gas targets, both conventional and unconventional, in the Fell and Tierra del Fuego blocks. The work program in Chile includes:
• One development well and one exploration well to continue developing and exploring gas opportunities in the Jauke/Dicky large geological structure in the Fell block (GeoPark operated, 100% WI)
• One exploration oil well in Isla Norte block (GeoPark operated, 60% WI) in Tierra del Fuego
• Testing high-potential unconventional projects including a tight gas play in the Tranquilo block and in a large shale oil formation in the Estratos con Favrella in the Fell block (220-600 mmboe potential)
• Brazil – $3-4 million: Exploration drilling in the Reconcavo and Potiguar onshore blocks (GeoPark operated, 70-100% WI). The work program in Brazil includes drilling 1-2 shallow exploration wells, plus minor maintenance activities in the Manati gas field (GeoPark non-operated, 10% WI).
• Flexible to Different Oil Price Scenarios

The 2019 work program is fully funded with operating cash flows and can be adapted to provide production growth under different oil price scenarios.

• Above $70/bbl Brent oil price:    Capital expenditures can be expanded to $240-270 million – by adding incremental projects, targeting production growth of 15-20%.
• Below $60/bbl Brent oil price:        Capital expenditures can be reduced to $120-140 million – focusing on the lowest-risk projects that produce the fastest cash flow, still targeting production growth of 15%.

GeoPark currently has commodity risk management contracts in place covering 35-50% of its production for 2019 with floors of $60-65/bbl and ceilings of $90-97/bbl Brent. GeoPark monitors market conditions on a continuing basis and may enter into new commodity risk management contracts to secure minimum oil prices for its 2019 production and beyond.

Estimated Operating Netbacks

Consolidated operating netback per boe: Defined as net revenue minus operating costs, royalties and selling expenses, it is estimated to be approximately $31-34 per boe with a $70-75 Brent oil price, and approximately $28-31 per boe with a $65-70 Brent oil price.
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Source: GeoPark

Perenco in Brazil

Brazilian oil firm Petrobras has sold three shallow water fields in the Campos basin to Perenco for $370 million.

Petrobras on Wednesday signed deals with Perenco to divest its stake in the fields of Pargo, Carapeba and Vermelho, the so-called Polo Nordeste, located in shallow waters off the coast of Rio de Janeiro state.

The Pargo field was discovered in 1975, and the fields of Carapeba and Vermelho in 1982, and their production was started in 1988. These concessions were granted to Petrobras in 1998 in the so-called Bidding Round Zero.

The fields are located in shallow water at a distance of ~60 km from the coast with reservoir depth between c.2,700 to 3,750 meters.

Currently, these fields’ production system is integrated and consists of seven jacket fixed platforms, with current production of approximately 9,000 barrels of oil per day, which is exported through the Garoupa platform (PGP-1) and goes to the continent via pipeline to the Cabiúnas Terminal, Petrobras said.

Under the terms of the agreement, Perenco will pay $370 million, 20% of which (US$ 74 million) to be paid on the signing and the remainder in the closing of the transaction.

Petrobras said the sale was a part of Petrobras’ Partnerships and Divestments Program, aligned to the 2018-2022 Business and Management Plan, which provides for continuous portfolio management and focus on investments in Brazilian deepwater.

The Brazilian company had announced a teaser for the sale back in July 2017. The fields were at the time marketed as “currently producing from 57 wells and 7 fixed platforms,” with “some exploration prospects identified” and license expiry in 2025 with option to extend.

AES in Dominican Republic, eyes growth in Panama

AES inks Dominican Republic deal, eyes LNG growth in Panamazoom
Image courtesy of AES Panama
US energy company AES Corporation, signed a long-term deal to provide regasified liquefied natural gas to a Barrick Pueblo Viejo in the Dominican Republic.

Under the 10-year deal AES, through its unit, AES Andrés, agreed to deliver 9 trillion British thermal units to Barrick’s 215 Quisqueya I power plant.

Andrés Gluski, AES president and CEO said the company is now “nearly fully utilizing the terminal’s capacity.”

The AES Andres facility provides gas to AES Dominicana’s two gas-fired power plants as well as 50 industrial clients, two third-party power plants and 15,000 gas vehicles in the Dominican Republic.

AES is currently constructing an LNG receiving terminal in Panama to be completed in mid-2019, the first of its kind in Central America.

“We expect to replicate this success in Panama, where approximately 60 percent of the tank’s capacity is available for future growth,” Gluski said.

Year-to-date the company has sold 25 TBTU of its excess LNG capacity, to meet growing demand for efficient natural gas in the region, leaving approximately 60 tBtu of excess capacity representing potential upside.

The plant and regasification terminal were inaugurated in August, and the LNG tank, which will be the largest in the Caribbean, is expected to begin operations in2019.

Currently, the 154,000-cbm LNG carrier Provalys, that is now part of Total’s fleet following its acquisition of Engie’s portfolio of upstream liquefied natural gas (LNG) assets in July serves as a floating storage unit, and will be replaced by Gaselys, that has the same characteristics, AES Panama said in an earlier statement.

Colombia 

Amerisur Resources -Mecaya Transaction:

The Company announces the acquisition of the outstanding working interest in the Mecaya contract in the Caguan-Putumayo basin, bringing the Company to 100% working interest holder and Operator from 15% interest (58% effective economic interest). The Mecaya block lies adjacent to Putumayo-9 covering approx. 74,128 acres and has a faulted zone with potential traps similar to those in the Platanillo field. The Mecaya-1 well, drilled in 1989 produced 682 bopd of 27 degree API oil with 0% water on test from the M2 reservoir. An early objective of the programme within the Mecaya block is to place Mecaya-1 on long term test.

Amerisur has been relieved of its obligation to carry capital expenditure of approx. $8.6m and in exchange the Company will make the following payments:

Mecaya Oil and Gas will cede a 55% working interest in exchange for:

• A cash payment of US$400,000 over a three-year period.
• The payment of US$1.2mm from 50% of Amerisur production in the Mecaya block, payable only when the block is in production.
• Once the production payment has been completed, a royalty payment equal to 4% of production revenue post Government royalties.
• Petex Offshore Inc. will cede a 30% working interest in exchange for:
  • A cash payment on completion of US$150,000.
  • The payment of US$600,000 from 10% of Amerisur production in the Mecaya block, payable only when the block is in production.
  • A royalty payment equal to 2.2% of production revenue post Government royalties.

Completion of this transaction is conditional on approval from the Agencia Nacional de Hidrocarburos (‘ANH’).

Indico-1 Update

The Operator has informed the Company that Indico-1 drilling is proceeding satisfactorily to plan and budget. The well is currently at approximately 6,500 feet in the 12.1/4″ hole section. Total depth for the well is estimated at 10,780 feet. The Operator estimates a gross P50 recoverable resource at Indico-1 of 10.3 MMBO.

Chiritza Update

The Chiritza station has now been commissioned on time and budget and hence Amerisur capacity right has increased to 9,000 barrels of oil per day (“bopd”) through its OBA pipeline. The Company is now recovering its capex of US$3.9m through a period where the US$1.09 per barrel Lago Agrio tariff is not paid on the first 5,000 bopd evacuated through the system until the total capex is re-paid. The Company is currently reviewing options to utilise that capacity through the purchase of local crude oil as an interim measure until Company production increases.

John Wardle, CEO of Amerisur said:

‘I am very pleased to have consolidated our position in the Mecaya block under these attractive terms. The payments due to the previous partners are now, in the main, dependent upon successful production from the block, as opposed to the carry requirement we inherited by way of our original acquisition. Importantly, the increase of our working interest to 100% offers us significantly increased materiality together with wider strategic options.

‘I am also pleased at the progress achieved by our partner in the CPO-5 block, where we look forward to entering the potential reservoir in this exciting prospect.’

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Source: Amerisur Resources

Amerisur Resources signs farm-out agreement with Occidental Andina

 

Amerisur Resources, the oil and gas producer and explorer focused on South America, has entered into a farm-out agreement with Occidental Andina, an affiliate of Occidental Petroleum Corp, across the following exploration blocks: Putumayo-9, Terecay, Tacacho and Mecaya, all in the Putumayo region, in southern Colombia.

In consideration of the acquisition of a 50% interest in each block, Occidental Andina will fund a $93.25m exploration and appraisal program between 2019-2021. Occidental Andina will fund 85% of the total planned 2D seismic cost expenditure of US$65,000,000 and 100% of the US$38,000,000 planned drilling program.

The companies have agreed there will be a dedicated transport capacity in the OBA for the transport of oil from the Farm-out Blocks, with a commercial tariff charged for Occidental Andina’s share.

Amerisur Exploracion Colombia, a subsidiary of the Company will be the operator of the Farm-out Blocks, which extend over 1.4 million acres and have prospective resources of 656 MMBO. The work program includes the acquisition of 878 Km of 2D Seismic and the drilling of five exploration wells.

Completion of this transaction is conditional on approval from the Agencia Nacional de Hidrocarburos (“ANH”) and all parties will now work towards obtaining this.

John Wardle, CEO of Amerisur said:

‘It gives me great pleasure to welcome Occidental Andina as our partner into these important blocks. Occidental Andina has a long and distinguished history in Colombia, with great understanding of the geological and operating environment, and an outstanding technical team with whom we enjoy a close and harmonious relationship.

‘The farm out recognises the significant value we have created during our growth phase over the last few years and this transaction will now amply fund, widen and bring forward our exploration programmes in the Put-9, Tacacho, Terecay and Mecaya properties, which we and our new partner believe to hold very substantial resource potential. As operator, we are already working on the programmes to be executed in these blocks and expect to progress those activities in the near term.’

Giles Clarke, Chairman of Amerisur said:

‘The farm-out to Occidental Andina is a strong endorsement of the attractiveness of our acreage position in the Putumayo basin and Colombia, which we built at low cost in the oil market downturn, and the value of the OBA pipeline for the evacuation of oil from these blocks. It accelerates our upcoming work programme while significantly reducing our future capex requirements. We have been committed to working through the social issues in the region and continue our ongoing support of the peace process. I would like to thank our shareholders for their continued patience and support of Amerisur’s growth ambitions.’

For further information see Amerisur’s Farmout Presentation: Transformational Farm-Out to Occidental Andina

Source: Amerisur Resources

French Guiana

Total Planning Exploration Well Offshore

(AAPG Datapages/Search and Discovery Article #90312 ©2017 AAPG Latin American Region GTW,)

Deepwater Exploration of the Columbus & Guiana Basins, Georgetown, Guyana, November 6-8, 2017 Guyane Maritime Block, Offshore French Guiana: a Long Path to Success Nathalie Aubet1, R. Maia1, A. Kalna1, and G. Baudot1 1 Total

ABSTRACT Since 2001, the Exploration on the Guyane Maritime block offshore French Guiana was a long and fascinating journey. Comforted by the lessons learnt from our long-standing exploration Experience of the area, and working with determination and perseverance to clear the path for future successes, Total is setting the stage for a new chapter. Exciting new prospects are being prepared for drilling on this large license with proven oil potential. The spud of Nasua-1 well is planned late 2018. Total signed agreements to acquire interests into two exploration licenses offshore Guyana, the Canje Block and the Kanuku Block. These agreements come after entering into an option agreement for the nearby Orinduik Block. Total will thus own exploration rights to an area covering over 12,000 square kilometers in the Guyana Basin.

In February Arnaud Breuillac, President, Exploration & Production said:

Total is very pleased with this significant entry in the prolific Guyana Basin. Canje, Kanuku and Orinduik blocks are located in a very favorable petroleum context, evidenced by the Liza discovery in 2015. Acquiring interests in these highly prospective licenses is in line with the new exploration strategy in place since 2015.

Total acquired a 35% working interest in the Canje Block, in water depths of 1,700 to 3,000 meters, under the terms of the agreement signed with an affiliate of Canadian company JHI Associates, Inc. and Guyana-based company Mid-Atlantic Oil & Gas, Inc. These two companies will retain a shared 30% interest alongside operator ExxonMobil (35%).

Total acquired a 25% working interest in the Kanuku Block, in water depths of 70 to 100 meters, under the terms of the agreement signed with operator Repsol (37.5%), and will be a partner alongside Tullow (37.5%).

Total purchased a 25% working interest in the Orinduik Block, in water depths of 70 to 100 meters, under the agreement with an affiliate of Canadian company Eco Atlantic Oil & Gas Ltd, who will retain a 15% interest following exercise of the option, alongside operator Tullow (60%).