Apco has also signed an agreement with Madalena Ventures and Argentine oil and gas company Roch. Gas y Petroleo de Neuquen, an energy company in the province of Neuquen, is also a participant in the Coiron Amargo property and approved Apco’s participation.
The agreement requires Apco to drill two exploration wells during 2010 to earn a 22.5% interest. The terms also include an option for Apco to drill two more wells during the latter part of 2010 and in 2011 to increase its interest to 45% in the entire Coiron Amargo block. Within the Neuquen Basin, Apco is active in the Entre Lomas, Bajada del Palo and Agua Amarga areas. Along with the Coiron Amargo area, these properties represent approximately 490,000 gross acres.
Thomas Bueno, president and chief operating officer of Apco, said: “Our evaluation indicates that the subsurface geology is quite similar to that found in the southeast part of our Entre Lomas concession and to what we have encountered since 2007 in the Bajada del Palo and Agua Amarga blocks. In Coiron Amargo, we hope to apply the same geologic model that we have successfully used to drill exploration wells over the last few years in our adjacent blocks.”
The Coiron Amargo properties, operated by Roch, are permitted under a three-year exploration period expiring in November 2010 after which the acreage associated with commercial discoveries can be converted to a 25-year exploitation concession.
The partners plan to request an extension of the exploration period on the Corion Amargo properties to facilitate the second phase of drilling associated with the farm-in agreement. Apco expects to commence drilling by mid 2010.
