Groundstar unlikely to begin drilling by early next month

– Dennison
It is unlikely that Groundstar will begin drilling for oil at its Takutu basin location by the beginning of December.

Head of the Petroleum Division at the Guyana Geology and Mines Com-mission Newell Dennison visited the drill site recently and when contacted, in a brief comment, told Stabroek News that from his observations, it is unlikely that drilling would start at Takutu by the beginning of December. He said workers were working diligently to set up equipment. “They are working. Equip-ment is coming in,” he said.

Weather, which led to sections of the Linden-Lethem trail being rendered impassable several weeks ago as well as some problems with customs led to delays, in setting up for drilling. In September, Groundstar had announced that it planned to begin drilling for oil in mid-October. In a statement, it had said that most of the drilling rig had arrived on the Apoteri K2 drilling location while the remainder was in the process of clearing customs in Manaus, Brazil prior to being mobilized to the location. The company had anticipated that the well will take 50 days to drill. Previously, the company had anticipated drilling beginning in August.

The operation will be the first such major operation here in ten years. Canacol Energy Ltd holds 90% interest in the Takutu Petroleum Prospecting Licence (PPL) while Groundstar has the remaining 10% working interest. The Takutu PPL contains the Karanambo discovery drilled by Home Oil in 1982.

In November last year, Canacol completed a farm-out agreement with Sagres Energy Inc whereby Sagres acquired a 25% interest in the exploration agreement by agreeing to fund 30% (US$1.25 million) of costs of drilling the K-2 exploration well; bringing Canacol’s net working interest to 65%. Under the terms of the agreement, the Corporation and Sagres will carry Groundstar’s 10% remaining working interest until first commercial oil production.

The joint venture plans to drill the Apoteri K-2 well to a total measured depth of approximately 11 000 feet. Gaffney Cline and Associates attributed gross mean recoverable prospective resources of 128 million barrels of oil to the discovery in a December 2009 report compiled for Canacol. Up to September, Groundstar had said that it had completed the construction of the drilling pad, access roads, and staging areas in preparation for drilling, and has purchased and mobilized wellheads sufficient for three wells which are in the country.  If successful the well will be put on a long-term production test to establish the deliverability and performance of the formations.

Last week, Canacol’s President and CEO, Charle Gamba, said that in the past 12 months the corporation has consolidated a significant oil production and exploration position in its focus areas of Colombia, Brazil, and Guyana, with interests in 7 producing conventional oil fields and 12 exploration contracts covering 3.1 million net acres.

For the remainder of 2010, the Canacol is focused on executing its development drilling on its operated oil producing assets in Colombia and Guyana to increase near term base oil production and cash flow, as well as continuing the ongoing appraisal activity on its non-operated Capella heavy oil discovery in Colombia, he said.

Next year, the corporation will focus on executing high impact oil exploration programs, which include the drilling of the second exploration well in Guyana, the drilling of one exploration well in Brazil, and the drilling of three development wells in Rancho Hermoso. Gamba said that with the closing of a US$39 million private placement in July 2010, the corporation is fully funded to execute its 2010 and 2011 programmes.

The last time that a well was supposed to be drilled here, in June 2000, Canadian oil exploration company, CGX Energy’s  rig was chased out of Guyana’s waters by Suriname gunboats as it was about to embark on drilling a well in the most promising area.

This led to a diplomatic crisis between Guyana and Suriname and years of futile talks. The deadlock was broken when Guyana took its case to the International Law of the Sea tribunal and secured a ruling largely in its favour in 2007. Since then expectations have been high over CGX resuming its oil search.

The company has said that it expects to commence drilling here next year after earlier saying that drilling could begin here in the latter part of this year. CGX has pushed back the expected drilling start a number of times.
The company says that the Jaguar well is planned to be drilled in the first half of 2011 while the Eagle well will be drilled after.

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