The Putumayo Block 14 (“PUT 14”) in the Caguan Putumayo Basin lies on Colombia’s border with Ecuador. The PUT-14 contract is currently in “Phase 0” which allows time to complete indigenous community consultation work (the “Consulta Previa”). Once the Consulta Previa is completed, the contract will then enter a full 3-year “Phase 1” Exploration period. During this Phase 1 Exploration period, the minimum work obligation is the collection of 98km of 2D seismic and the drilling of one exploration well.
It is reported that at least 35 fields containing more than 365 million barrels of oil have been discovered in the Caguan Putumayo Basin, whilst additional world class discoveries and producing fields located in the Oriente Basin in Ecuador lie directly to the south and are on trend towards Colombia’s Putumayo permitted acreage. Exploration prospectivity within the Caguan Putumayo Basin is considerable, with discoveries of light, medium and heavy crudes being located in several different horizons within the Cretaceous. Deeper potential also exists that is largely untested. A significant number of oil fields are now under production in the Colombian part of this basin in the vicinity of PUT 14 block. The Cohembi and Platanillo oil fields are located to the west of the block, and are producing from geological structures considered analogues to structures that can be identified within the PUT 14 block from existing legacy 2D seismic data.
The Llanos Block 50 (“LLA 50”) is in the mature north Llanos basin, where 100 km to the north-west, Occidental discovered the giant Canon Limon field with reported reserves of more than one billion barrels. The first exploration phase expires in November 2016 with a minimum work obligation of 103 km of 2D seismic data to be captured in a new survey and the drilling one exploration well. The Group has also undertaken to spend $0.1 million on an additional work programme obligation which may be satisfied via the acquisition of an additional 5 km of 2D seismic.
The Group continues to undertake the preliminary studies required to be completed prior to the commencement of either 2D or possibly exploration-oriented 3D seismic acquisition programmes on the contract areas.
The Group has recently initiated a farm-out exercise for its interests in the contract areas prior to any significant financial commitment with respect to further exploration work.