The consortium that recently completed drilling an exploratory oil well in the Rupununi has applied for permission to begin drilling another but the delay in releasing results of the first well has seen Canacol Energy Inc’s stock drop towards the lowest closing price in seven months.
Canacol holds the largest interest in the first well, the Apoteri K-2. It continues to drill and test the well, Kevin Flick, head of investor relations for the company told Bloomberg yesterday. Flick had earlier told Stabroek News that they will be reporting the results to the market and noted that the well is quite material to them as a public company. Officials here are mum on results from the well.
However, a Region Nine official yesterday told this newspaper that while there have been no firm results from the first well, the consortium has applied for permission to drill a second well.
Canada-based Groundstar Resources Inc has a 10% working interest in the Apoteri K-2 well and is the operator of the Petroleum Prospecting Licence with Canacol holding the remaining 90%. Sagres Energy Inc. is eligible to earn a 25% working interest in the PPL from Canacol by paying for 30% of the cost to drill the K-2 exploration well. Drilling had started on December 31 last year.
The consortium had reported earlier this year that plans for a second exploration well on the block by May 2011 are underway, with the choice of prospect (either the Rewa or the Pirara River) dependent on drilling results from Apoteri K-2. The second well will be operated by Canacol; Groundstar will be carried for a 10% net interest.
Meantime, Bloomberg reported yesterday that Calgary-based Canacol headed toward the lowest closing price in seven months on delayed results of drilling at the exploratory well here. The shares fell for the 11th consecutive day at the Bogota Stock Exchange, sinking 1.7 percent and a close at that level would be the lowest since September 30. The article noted that Canacol hasn’t given further details on plans for a second well in the Takutu block, which had been slated for next month.
“The stock is probably being hit due to a lack of information about that project,” Santiago Melo, an analyst at brokerage Alianza Valores SA in Bogota was quoted as saying. “The Colombian market has also been weak in general, but Canacol is out of the ordinary,” he said.
Flick said Canacol will release information about the well as soon as possible. “Until drilling and testing is done, I’ve been instructed to stay quiet,” he told Bloomberg. “I realise the market is skittish with the stock.”
For the Apoteri K-2, a target depth of approximately 3,350 meters (11,000 feet) was set to target the same productive reservoirs that tested over 400 barrels of oil per day of 42 degree API (American Petroleum Institute) light oil from the Karanambo 1 well drilled in 1982 and located 600 meters to the east of the current well. Gaffney Cline and Associates had attributed gross mean recoverable prospective resources of 128 million barrels of oil to the discovery in the December 2009 report compiled for Groundstar.
