President Energy announces farm-in to Paraguay block

President Energy announced that its conditional farm-in to the Hernandarias Block, in the Chaco Region of Paraguay, has been approved.

The Hernandarias Concession has successfully passed through both the Senate and House of Deputies and has been signed into law by the President of Paraguay, Horacio Cartes.

The concession covers 18,507 km² and is immediately to the north of the Pirity Concession where President Energy has recently drilled the Jacaranda prospect. The completion of the Hernandarias award, together with the Pirity and Demattei Concessions, gives President control and operatorship of the entire Pirity Rift Basin.

Live petroleum system

The prior discovery of a live petroleum system in the Jacaranda well gives significant encouragement to the promise of the plays in the Hernandarias Concession.

Three high graded prospect areas have been identified from recently acquired and historic 2D seismic data. The geological structures range in size from 30 km² to 150 km² and are developed at drill depths from 2000 m downwards.

Well costs will be correspondingly lower in the Hernandarias Concession than those in the Pirity Concession, and multiple Devonian reservoir targets appear to be present. The relatively shallow depth of burial suggests a majority of prospects will lie in the oil generating window within deeper structures, extending down to gas-condensate levels.

Farm-in agreement

As a consequence of the concession passing into law, President Energy has exercised its option under the Conditional Farm-in Agreement (CFA) to farm in up to a maximum of 80% participating interest in the concession, and to become operator of the concession.

Pursuant to the terms of the CFA, President has acquired a 40% interest in the concession and will earn a further 40% upon fulfillment of the remaining commitment under as US$ 17 million work program, which will include seismic acquisition and one well over the next three years.

Of the total US$ 17 million, US$ 1.6 million has already been spent during the 2013 seismic programme, with US$ 15.4 remaining to be spent over three years. President Energy’s partner in the Hernandarias Concession is Hidrocarburos Chaco S. A., a locally owned company.

Comments

President Energy Chairman, Peter Levine, commented: “We are very pleased to have farmed-in to the Hernandarias Concession, which undoubtedly enhances the value of President’s Paraguay interests and the optionality and flexibility for their development.

“The discovery by President of a substantial, thick, live source rock in the Pirity Concession, just across the Hernandarias Concession border, is very encouraging for the potential prospectivity of this play. We look forward to working with our partner to progress exploration.”

Adapted from press release by Katie Woodward

Read the article online at: https://www.oilfieldtechnology.com/exploration/18082014/president-energy-announces-approval-of-paraguay-farm-in-238/