The Cedrela E&P contract is located in the Putumayo-Caguan basin, and is approximately 50km directly to the southwest of the Ombu E&P contract, which contains the company’s Capella heavy oil discovery currently under appraisal.
Based upon the available geophysical and geological data in this frontier area, the company has identified two large structures similar in character to Capella on the Cedrela block. Canacol was awarded the block through direct negotiation with ANH.
Charle Gamba, president and CEO of Canacol, said: “Since the discovery of the Capella heavy oil field by Canacol in 2008, the corporation has been able to leverage its proprietary knowledge of the geology and potential of the area to capture three offsetting exploration blocks through direct negotiation with the ANH.
“These blocks all contain structures similar in character to the Capella discovery. The corporation is now positioned to execute a significant heavy oil exploration program in this emerging heavy oil play in Colombia.”
Canacol has a 100% working interest in the Cedrela E&P contract, which is 129,418 hectares in size. Under the terms of the six year contract, Canacol will acquire, process, and interpret 250km of 2D seismic, and interpret all existing magnetic and gravity geophysical data. The duration of this phase is 18 months, with an anticipated cost of approximately $5.4m.
During the phase 2 exploration period, the company will drill 1 exploration well. The duration of this phase is 18 months, with an anticipated cost of approximately $2m. It will acquire, process and interpret 60sqkm of 3D seismic in phase 3. The duration of this phase is 18 months, with an anticipated cost of approximately $3m.
Canacol will drill 1 exploration well in phase 4. The duration of this phase is 18 months, with an anticipated cost of approximately $2m. Based upon the results of the phase 1 exploration period activities, the company has the option to proceed to the phase 2 exploration period and associated activity or relinquish the contract.
