Alvopetro Energy Ltd. is pleased to announce the testing results from the third test interval of our 197(2) well and the acquisition of the remaining 50% working interest in Block 170.
In December 2014, our 197(2) well located on Block 197 in the Recôncavo basin in the State of Bahia, Brazil, reached a total depth of 1,669 metres, discovered natural gas, and was cased and cemented. Based on logs, the well encountered 78 metres of potential net natural gas pay, with an average 33% water saturation and an average porosity of 12%, using an 8% porosity cut-off. We perforated and completed the deepest sandstone interval, at 1,460 - 1,469 metres, and completed a 72 hour wireline perforated cased-hole test. This average 12.6% porosity interval flowed natural gas, on an unstimulated basis, at an average rate of 101,000 m3/d (3.6 MMcfpd or 600 boepd), with a 32/64" choke, using 2-7/8 inch tubing, from the Caruaçu Member of the Maracangalha Formation. The initial pressure transient analysis of this first interval forecasts potential post-stimulation rates at 261,000 m3/d (9.2 MMcfpd or 1,530 boepd) after three months of continuous production and 125,000 m3/d (4.4 MMcfpd or 730 boepd) after one year of continuous production, in both instances at 1,000 psi sandface pressure.
The second test, including the intervals from 1,371 - 1,376 and 1,384 - 1,389 metres, contained 10.5 metres of net pay and 13.6% average porosity. Over the 72 hour tubing conveyed perforated cased-hole test, the second intervals flowed natural gas, on an unstimulated basis, at an average rate of 53,000 m3/d (1.9 MMcfpd or 310 boepd), with a 32/64" choke, using 2-7/8 inch tubing, from the Caruaçu Member of the Maracangalha Formation.
The third test of the interval from 1,322 - 1,327 metres, contains 5 metres of net pay and 18% average porosity. Over the 72 hour wireline conveyed perforated cased-hole test, the third interval flowed natural gas, on an unstimulated basis, at an average rate of 89,500 m3/d (3.2 MMcfpd or 527 boepd), with a 48/64" choke, using 2-7/8 inch tubing, from the Caruaçu Member of the Maracangalha Formation. At commencement of the third test, the flowing tubing pressure at the wellhead was 1,650 kPa (239 psig) and increased to 1,810 kPa (263 psig) at the end of the test. The initial shut-in casing pressure in the wellbore at commencement of the test was 10,700 kPa (1550 psig) and the ending shut-in casing pressure was 3,010 kPa (437 psig). Cumulatively, over the duration of this 72 hour test, the well produced 269,000 m3 (9.5 MMcf) of natural gas. During the course of this test, in addition to the natural gas and not included in any flow rates reported above, we recovered 25.6 barrels of 62° API condensate and 5 barrels of water.
The 197(2) well is currently shut-in to measure reservoir pressure and obtain pressure build-up data to undertake a pressure transient analysis, which will allow Alvopetro to predict the deliverability of this third interval. The well will be suspended while the flow and build-up data is incorporated into a final completion design.
Block 170 Acquisition
During 2014, we focused significant effort on reprocessing and interpreting our extensive 3D seismic database, enabling us to expand our 9-prospect inventory of conventional exploration opportunities to an 18-prospect inventory. One of our more prospective conventional oil exploration opportunities is a shallower target on Block 170, at 2,000 metres vertical depth, that we plan to drill in the second half of 2015.
Alvopetro has acquired the remaining working interest in Block 170 subject to Brazil's National Agency of Petroleum, Natural Gas and Biofuels ("ANP") approval. Prior to the acquisition, Alvopetro had a commitment to pay 100% of the cost of a well drilled to the Gomo Formation (3,200 metres vertical depth) to retain a 90% interest in the Gomo Formation and a 50% interest in all formations above the Gomo. This acquisition allows us to significantly reduce our capital commitments on Block 170 by drilling a shallower well and to retain 100% of the upside associated with this high priority prospect.
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