The consortium that came up dry in the Apoteri K-2 exploratory oil well here sunk US$15 million into that venture, according to a report in the online edition of the oil and gas journal, Upstream.
Shares of Canacol Energy, Sagres Energy and Groundstar Resources fell after the Canadian explorers abandoned the well in the Takutu basin of Guyana as they failed to find oil. A company representative did not immediately respond to questions from Stabroek News yesterday.
The Calgary, Alberta-based energy explorers, which have together invested about $15 million on the Apoteri K-2 well so far, said they found water while they were drilling for oil, Reuters reported. “Typically, we encounter water below where we want to find oil, and since that was not the case, we have to abandon the well,” Kam Fard, Groundstar executive, told Reuters by phone.
Groundstar, which holds a 10% working interest in the project, is the prime operator on the Takutu basin. Shares of the company fell 30% to touch a low of 28.5 Canadian cents on Monday on the Toronto Venture Exchange.
Canacol, which has operations in Colombia, Guyana and Brazil, had planned to drill up to 11,000 feet on the Apoteri well, and had targeted reservoirs of over 400 barrels of oil per day, similar to the results from a well drilled in 1982, 600 metres away.
In a statement on Monday, the companies said they plan to permanently abandon the Apoteri K-2 well after reaching the intended depth and seeing no signs of oil in commercial quantities, and are evaluating the next drilling area on the block.
Shares of Sagres, which earned a 25% working interest in the K-2 exploration contract by paying 30% of the cost to drill the well, were down 49% at 17 Canadian cents on Monday. “In our business, some wells are producers, and some are not.
But we just keep going,” Fard said. Following the announcement of the decision to abandon the well, Canocol’s stock in Colombia had dropped as well and a report on the Dow Jones stock exchange quoted the company’s CEO, Charle Gamba as saying he wasn’t worried by the drop in the share price and the company isn’t dwelling on the decision to close the well in Guyana. “It’s bad news on the exploration front, but we have other exploration projects and we are concentrating in Colombia,” Gamba told Dow Jones. Canacol held the largest interest in the Apoteri K-2. 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.
Under the terms of a new (May 22, 2009) three-year Petroleum Agreement with the Guyana Geology and Mines Commission, Groundstar was obliged to drill one exploration well by May 22, 2010, and a second well by May 22, 2011, according to information on the company’s website. The consortium had purchased and mobilized wellheads sufficient for 3 wells which are in country.
Stabroek News was told earlier this month that while there had been no firm results from the first well, the consortium had applied for permission to drill a second well.
