Information  X 
Enter a valid email address

Adulis Resources Inc (ADS)

  Print   

Thursday 28 July, 2005

Adulis Resources Inc

Colombian Operations Update

Adulis Resources Inc.
28 July 2005





                             ADULIS RESOURCES INC.

                        ('Adulis' or the 'the Company')



                          Colombian Operations Update





Adulis Resources Inc. (TSX-V: ADE; AIM: ADS), the Colombian focused independent
oil and gas exploration and production company, today announces an update on
operations. Adulis operates in Colombia through Solana Petroleum Exploration
Colombia Limited ('Solana'), Adulis' wholly owned subsidiary.

The drilling programme currently consists of twelve exploration wells, one
development well and one re-completion of an undeveloped discovery.


Two fold strategy

Adulis is continuing to pursue a two fold strategy to achieve the Company's
goals of:

 1. Pursuing high impact exploration ventures.
 2. Undertaking low risk development and semi-development projects to provide
    early cash flow to fund additional initiatives, associated overhead and
    evaluation costs.

As a result of this strategy the Company has participated in the drilling of
four wells and one workover to date. In addition, two wells are currently
drilling and at least seven wells will be drilled within the next twelve months.


Guayuyaco Block

The Guayuyaco Block is located in the Putumayo basin of southern Colombia. The
Block is operated by Argosy Energy International LLP, and Solana has a 35%
working interest, after Ecopetrol, the Colombian State oil company, exercises a
30% back in right.

Guayuyaco 1 (G1) well

  • G1 continues to produce at approximately 950 Bopd.
  • G1 has already produced approximately 90,000 barrels, or US$ 4,000,000
    worth of oil, since the end of February 2005.
  • The G1 well cost approximately $US 4,400,000 to drill.

Guayuyaco 2 (G2) well

  • G2 has been drilled to a measured depth of 8433 ft. (true vertical depth
    of 8022 ft. and a subsea depth of -7019) to a bottom hole location
    approximately 2290 ft. west and 128 ft. north of the G1 discovery well. This
    well was targeted at three reservoirs; the Lower U Sand, the T Sand and the
    Caballos Sand, all of which produced oil at the G1 well.
  • Logging operations have been completed and, based on preliminary
    interpretation the three target reservoirs came in 36 ft., 20 ft., and 24
    ft. higher respectively than at G1.
  • A preliminary review of the log data indicates that the net oil pay in the
    Lower U, T, and Caballos sands is 51 ft. 60, ft, and 25 ft. respectively and
    this corresponds to 15 ft., 62. ft. and 15 ft. respectively at G1.  Total
    net oil pay at G2 is interpreted to be approximately 136 ft. compared to 102
    ft. at G1.
  • The well will now be completed and tested prior to being put on a long
    term flow test.
  • The G2 well was drilled from the G1 surface location and hence oil from
    both wells will be trucked approximately 5 kms to the Mary battery, pending
    the construction of a permanent pipeline that is expected to be installed by
    the end of 2005.


Juanambu structure

The Juanambu structure is located to the west of the Guayuyaco discovery.

  • Preparations are under way to conduct a combined 2D/3D seismic survey
    commencing in two months time.
  • The 3D data will be used to confirm the current mapping of the Juanambu
    structure.
  • The 2D data will assist in converting several existing leads into
    drillable prospects.
  • Juanambu is scheduled for drilling during the first quarter of 2006.


Puma Well

The Puma prospect is located in the Putumayo basin of south western Colombia.
Adulis has an 18.75% profits interest and participates in this project under the
terms of a Shared Risk Contract signed jointly with Ecopetrol and Ramshorn (a
subsidiary of Nabors Drilling).

  • Puma was spudded on July 14 and is currently drilling at approximately
    4,000 ft.
  • The Puma well is programmed to a depth of 11,600 feet and is designed to
    test a large prospect on the downthrown side of a reverse fault.
  • The Puma well is located nearly 10km south of the Orito field which has
    produced more than 230 million barrels of 36 to 40 API.
  • The oil production at Orito is from a structural trap on the eastern or
    upthrown side of the fault which borders the Puma structure to the west.


Bucaro Discovery

The road to the Bucaro well, which tested 28 deg. API oil at rates considered to
be commercial as previously reported, has now been completed. A site visit was
conducted recently by Solana and Ministry of Environment officials in order to
complete the process of making an application for approval to begin oil trucking
operations.


Financial Update

Adulis' consolidated working capital decreased from $58,678,428 (Cdn) at
December 31, 2004 to $47,181,000 (Cdn) at May 31, 2005, largely due to the cash
outflow related to the Company's exploration activities in the five month period
ended May 31, 2005.

Adulis' net participation from Guayuyaco 1, which produced 57,000 Bbls to May 31
2005, resulted in the Company receiving revenues amounting to $1,065,500 net of
royalties.

The Company's cash balances at May 31, 2005, amounting to $44,603,000 (Cdn) and
$900,000 (Cdn) in restricted cash, are committed to the Company's planned
capital expenditure program in Colombia, which will result in eight exploration
wells and one development well to be drilled in the remainder of 2005 and the
first quarter of 2006. The Company expects to have sufficient working capital to
meet these commitments.


                                                                    28 July 2005

Enquiries:


Adulis Resources
Stephen Newton            [email protected]      +0057 1 629 1636
Ray Antony                [email protected]                       +00 403 266 7512

Pelham Public Relations
Charles Vivian            [email protected]            +4402077436672
Alisdair Haythornthwaite  [email protected]  +442077436676




                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                                                                                                                                                                                                      

a d v e r t i s e m e n t