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Adulis Resources Inc (ADS)

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Wednesday 23 February, 2005

Adulis Resources Inc

Drilling Report

Adulis Resources Inc.
23 February 2005

                             ADULIS RESOURCES INC.

                                  NEWS RELEASE

                      COLOMBIAN EXPLORATION PROGRAM UPDATE

February 22, 2005               Calgary, Alberta

                                 Trading Update
                                 ______________


Adulis Resources Inc., the oil and gas exploration and production company which
listed on AIM in November 2004 with the primary objective to explore and develop
prospective oil and gas properties in Colombia, announces a drilling update.

Adulis Resources Inc. announces the results of the first two wells of its ten
well drilling programme in Colombia, the spudding of its third well, the Sirruma
well, and the signing of the Guachiria Norte contract.

Adulis was listed on AIM in November 2004 and has a portfolio of ten independent
exploration properties within Colombia to be drilled this year.  Adulis'
exploration programme is being funded from existing resources following its
£22.7m fundraising in November 2004.

KEY POINTS:

o        Guayuyaco 1 well, in the Putumyo basin of Southern Colombia

            o        Oil successfully tested from three separate zones

            o        First test results in the Caballos formation flowed at a
rate of 270 bopd over a ten hour flow period.  Following analysis Caballos zone
expected to produce in excess of 1,000 bopd once pumping facilities have been
installed.

            o        Second test results in the T Sand of the Villeta formation
flowed at a rate of 145 bopd over a ten hour flow period. Wells located in the
analogous Mary field produce in excess of 1,000 bopd from the T Sand formation
once pumping facilities have been installed.

            o        Third test results in the Guayuyaco 1 well in lower U Sand
of the Villeta formation produced approximately 600 barrels of fluid per day
with a 15% oil content from two perforated intervals.  Subsequently, the upper
interval was tested separately to yield 300 bopd of dry oil. It is currently
estimated that the installation of appropriate pumping facilities would result
in the production of approximately 500 bopd from the Lower U Sand.

o        Production from the Guayuyaco discovery is expected to commence within
two months.

o        Plans to drill a follow up well ('Guayuyaco - 2') within three months
and undertake an exploration seismic and drilling programme on other prospects
defined within the block.

o        The Guayabillas 1 well, in the Upper Magdalena basin of Southern
Colombia

            o        Drilled to a depth of 7470 ft. with two tests conducted

            o        The second test recovered several barrels of emulsion and
traces of heavy oil

            o        Produced oil and test results currently being evaluated

            o        Well suspended and rig released

o        Sirruma well, the first of two planned exploration wells on this block
located in the Guajira in the Northern coast of Colombia, spudded on 20 February
2005.  This well is targeted at a large gas prospect interpreted to exist in a
seismically defined turbidite deposit.

o        Guachiria Norte Contract, a 41,000 hectare block located to the north
of the currently held Guachiria Contract, was signed with the National
Hydrocarbon Agency on December 22, 2004.

Stephen Newton, President of Adulis Resources Inc. commented:

'Our ten well drilling programme in Colombia has started well with first
production expected to commence within the next two months from existing
infrastructure.'

'Aside from our high impact exploration programme which is underway we are
continuing to evaluate further opportunities within Colombia in order to build a
material Colombian oil and gas business.'

                                Drilling Update
                                _______________


Adulis Resources Inc. is pleased to provide this update for its ongoing
Colombian exploration program.  All of Adulis' operations are conducted in
Colombia through its wholly-owned subsidiary, Solana Petroleum Exploration
Colombia Limited ('Solana').

The Guayabillas 1 well, in the Upper Magdalena basin of southern Colombia, a
well operated by Ecopetrol, the Colombian state oil company, was drilled to a
depth of 7470 ft. measured depth, 7118 ft. true vertical depth, at a cost of
approximately US$ 4.5 MM. Two tests were conducted over the Montserrate
Formation in this well. The first recovered essentially no reservoir fluid and
the second recovered several barrels of emulsion and heavy oil traces, with an
estimated gravity between 5.7 and 8 deg API. The produced oil and the test
results are currently being evaluated in the Ecopetrol laboratories. The well
has been suspended and the rig released. Solana has participated in the well
through a commercial agreement with Ramshorn International, a wholly owned
subsidiary of Nabors Industries, whereby Solana pays 96% of Ramshorn's costs to
earn 75% of Ramshorn's interest.  Solana has applied for Ecopetrol approval to
be a party to the shared risk contract governing, among others, the Guayabillas
prospect.

The Guayuyaco 1 well, in the Putumayo basin of southern Colombia, is operated by
Argosy Energy International in which Solana has a commercial agreement with
Argosy to earn a 50% interest in the Guayuyaco Association Contract, subject to
Ecopetrol approval which has a 30% back-in right.  In order to earn the 50%
interest, Solana must participate in the drilling of two exploration wells of
which Guayuyaco 1 is the initial well.

Adulis announces that oil has been successfully tested from three separate
zones.  Solana paid 66.7% of the Guayuyaco 1 well costs, which is estimated to
be US$ 4.4 million (gross), including completion and tie-in.

The first test was conducted in the Caballos formation and covered a perforated
interval from 7,882 ft. to 7,904 ft. (22 ft.).  This section contained 25 ft. of
net oil pay based on log interpretation.  The test flowed clean 29 deg. API oil
at a rate of 270 bopd under stable natural flow conditions on a 10 hour flow
period.  Test derived permeability in the tested Caballos zone is approximately
180 millidarcies and log derived porosity is in the range of 12 to 15%.
Previous wells in this area, including those in the Mary oil field located 3 km.
to the east, have tended not to flow naturally due to very low gas-oil ratios in
the region.  It is the expectation, based on engineering analysis, that the
Caballos zone is capable of producing in excess of 1,000 bopd once pumping
facilities have been installed.

The second test was conducted in the T Sand of the Villeta formation and covered
a 36 ft. interval from 7,754 ft. to 7,790 ft. of which 31 ft. were perforated.
This perforated interval was located at the top of a section of interpreted oil
pay, which is 75 ft. thick based on log analysis.  This test flowed 28.2 deg.
API clean oil at a rate of 145 bopd over a 10-hour flow period.  Based on log
evidence, no water leg is believed to exist in this interval in the Guayuyaco
wellbore.  The T interval contains sands with log-derived porosities in the
range of 10 to 15% with test-derived permeabilities of 400 to 700 millidarcies
and minor formation damage.  Wells located in the analogous Mary field typically
produce in excess of 1,000 bopd from the T Sand formation once pumping
facilities have been installed.

The third set of tests in the Guayuyaco 1 well was conducted in the Lower U Sand
of the Villeta formation. The Lower U Sand formation is approximately 48 ft.
thick at the Guayuyaco location and includes at least 10 ft. of oil pay based on
log interpretation and test results.  The Lower U Sand was tested over two
perforated intervals covering 7,590 ft. to 7,599 ft and 7,604 ft. to 7,620 ft.
respectively.  The initial test was conducted with a hydraulic pump over both
sets of perforations and produced approximately 600 barrels of fluid per day
with a 15% oil content.  Subsequently, the upper perforated interval from 7,590
to 7,599 ft. was tested independently on hydraulic pump and produced clean oil
at a rate of 300 bopd. This part of the interval is characterized by sands with
porosity in the range of 12 to 15% and test derived permeability of 280
millidarcies.  While the implications of the two tests in the Upper U will
continue to be evaluated, it is estimated that the installation of appropriate
pumping facilities would result in the production of approximately 500 bopd from
the Lower U sand. In addition to the three oil bearing intervals described
above, a fourth potentially oil bearing interval of 6 ft. was found in the N
Sand which was penetrated at approximately 6940 ft.  This section appears to be
oil pay based on log analysis and shows recorded while drilling and will be
evaluated in a future well.

The Guayuyaco structure is located within 7 km. of the production base in the
Mary field, which has both production facilities with excess oil handling
capacity and access to an export pipeline.  Accordingly, production from the
Guayuyaco discovery is expected to commence within two months.  Oil well Mary 2,
approximately 3.9 km. from Guayuyaco 1, is located in the analogous Mary
oilfield and is the nearest producing well to Guayuyaco 1.  It is anticipated
that the Guayuyaco 1 well will be initially produced from the Caballos and the T
Sands of the Villeta formation.  The anticipated sales price is equal to the
monthly average West Texas Intermediate price less a discount for quality
adjustment, transportation, insurance and taxes.  Argosy and Solana plan to
drill a follow-up well named Guayuyaco-2 within three months with the same rig
and undertake an exploration seismic and drilling program on other prospects
already defined on this block.

The Sirruma well, the first of the two currently programmed exploration wells to
be drilled on the 100% held (subject to a 30% Ecopetrol back in right) Salinas
Block located in the Guajira on the northern coast of Colombia, spudded on
February 20, 2005.  This well is targeted at a large gas prospect interpreted to
exist in a seismically defined turbidite deposit.

In addition, Solana signed the Guachiria Norte Contract on December 22, 2004.
The contract area comprises 41,000 hectares located immediately to the north of
the existing Guachiria contract area in the Llanos basin in the Department of
Casanare.  This is the first contract Solana has signed with Colombia's National
Hydrocarbon Agency (ANH).  The contracted area includes 130 km2 of 3D and
approximately 700 kms of 2D seismic.  The first year obligation includes the
drilling of one well.

Adulis also announces that Solana has contracted a seismic crew to acquire
approximately 140 km. of new seismic data to further define planned drilling
locations on several contract areas held as to 100% by Solana, including
Guachiria,  the recently acquired Guachiria Norte (held under ANH terms) and
Gaviotas.

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
release.

This news release includes statements about expected future events that are
forward looking in nature and subject to risks and uncertainties. Adulis
cautions that actual performance may be affected by a number of factors, many of
which are beyond its control. Future events and results may vary substantially
from what is currently foreseen by Adulis.

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

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

Pelham Public        James Henderson      [email protected]          +4402077436673
Relations
                     Charles Vivian       [email protected]           +4402077436672






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