Information  X 
Enter a valid email address

Adulis Resources Inc (ADS)


Wednesday 21 September, 2005

Adulis Resources Inc

Colombian Operations Update

Adulis Resources Inc.
21 September 2005

                             ADULIS RESOURCES INC.
                        ('Adulis' or the 'the Company')

                          Colombian Operations Update

September 20, 2005               Calgary, Alberta

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.

Operational Highlights

  • Currently drilling Puma well and mobilizing rigs to drill Guariquies and
    Balu wells.
  • Current net production rate of 640 BOPD and 1.4 MMCF.
  • Looking ahead: 11 exploration wells planned within the next 12 months on
    currently held acreage.


Bucaro 1 Well Production Start-Up

The Bucaro 1 well, in the Guachiria Block, commenced production on September 15,
2005 and oil trucking operations have been initiated. This will allow for
extended production testing to gather information on sustainable flow rates as
well as allowing commercial production to begin. Sustainable flow rates will be
announced once production has stabilized. Oil sales and trucking agreements have
been finalized.  Solana will be entitled to receive 68% of the gross production
from this well after the deduction of various royalties and after the third
party, which assumed the capital cost and risk of the Bucaro re-completion, has
recovered double its current investment in this project. The Company expects to
generate revenues from this well commencing January 1, 2006.

Puma Well

The Puma well, located approximately 10km south of the Orito field which has
produced more than 230 million barrels of oil to date, was spudded on July 14,
2005 and has been drilled to approximately 12,000 ft.  The expected ultimate
total depth of the Puma well is estimated at 12,300 ft. with an associated cost
to the Company of approximately US$ 3,000,000.

During the drilling of the deepest section of the well and prior to penetrating
the full target reservoir section the drill string became stuck in the bottom
hole section.  The well has been plugged back and the bottom 600 ft. of the hole
will be re-drilled.  In the event that no further mechanical problems are
encountered, the Company expects to have log and test results in early October,

The Puma well is the second well drilled under the terms of a Shared Risk
Contract between Ecopetrol and Ramshorn International. Solana has a commercial
agreement with Ramshorn whereby Solana pays 96% of Ramshorn's share of the
initial well cost to casing point to earn 75% of Ramshorn's working interest.
Since Ramshorn has a 30% working interest in the Puma project, the net Solana
share of any production ultimately obtained from this block will be 18.75%.

Balu Well

The Balu well, located in the Middle Magdalena basin, spudded on September 16,
2005.  This block is operated by Petroleos Colombianos Ltd. and Solana will
receive a 42% working interest in any production derived from the Balu
structure. This would be reduced to 30% in the event Ecopetrol exercises its
contractual 30% back in right.

Under the terms of the agreement which governs the Balu project, Solana will
spend up to US$750,000 to drill a well to test this structure. This well is
expected to take approximately two weeks to drill with an additional 10 days
required to conduct drill stem tests in the event that hydrocarbons are

The Balu prospect is based on a shallow (less than 3,000 ft.) structure of
considerable size.  This prospect is supported by modern reprocessed seismic
data and the confirmation of thick and high quality reservoir facies as provided
by a nearby previously drilled well which was located outside the limits of the
Balu prospect.  Risks in the Balu area derive primarily from the requirement for
a fault seal to trap hydrocarbons.

Guayuyaco Field - Production Update

The Guayuyaco 1 and 2 wells continue to produce as previously announced.
Together these wells are currently producing approximately 1,900 BOPD (gross)
with more than 650 BOPD net to Solana. These wells provide cash flow to the
Company in amounts sufficient to cover current general and administration costs
and, in addition, make a contribution towards expenditures being incurred as
part of its exploration drilling program.

Seismic acquisition operations have commenced in areas near the Guayuyaco
discovery to define at least one prospect scheduled for drilling in late 2005 or
early 2006.


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]                  +442077436672
Alisdair Haythornthwaite           [email protected]        +442077436676

This release may contain forward looking statements within the meaning of the '
safe harbor' provisions of US laws.  These statements are based on management's
current expectations and beliefs and are subject to a number of risks and
uncertainties that could cause actual results to differ materially from those
described in the forward looking statements.  Adulis does not assume any
obligation to update any forward looking information contained in this news

The TSX Venture Exchange does not accept responsibility for the adequacy or
accuracy of this release.

                      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