Operations

Puesto Morales / Rinconada


Fig. 1

Fig. 2

Argentina

Puesto Morales

2008 (To Q/4)
  • 25 wells, No seismic
  • 17 Oil, 4 Inj, 1 Dual Inj & Oil
  • 1 Gas, 2 Dry
2008 (Q/4)
  • 1 oil well, No seismic

Rinconada

2008 (To Q/4)
  • 2 wells, No seismic
  • 1 Oil, 1 Dry
2008 (Q/4)
  • 1 well (WOC), No seismic

Vaca Mahuida (50% costs)

2008 (To Q/4)
  • 3 wells, 1,150 Km2 3D seismic
  • 1 Oil, 1 Dry, 1 WOC.
2008 (Q/4)
  • No wells, finished 3D processing

Gob. Ayala II

2008 (To Q/4)
  • No wells, process 210 Km2 3D
2008 (Q/4)
  • No wells, No seismic

Puesto Guevara

2008 (To Q/4)
  • No wells, 100 Km2 3D seismic
2008 (Q/4)
  • No wells, finished 3D processing

Puesto Morales Este

2008 (To Q/4)
  • 2 wells, No seismic
  • 1 Oil, 1 Gas
2008 (Q/4)
  • No wells, No seismic
  • Established production at Puesto Morales/ Rinconada blocks with prolific Sierras Blancas discoveries
  • Lower risk exploration/exploitation
  • Attractive fiscal terms despite price controls
  • Acquired 100% from Connacher in late 2004 for shares and a note
  • Production averaged +/- 300 boe/d in 2004 and has been increased to approximately 7,700 boe/d currently (Q3 2008)
  • Infrastructure in place
  • Shallow drilling depths
  • Multiple pay zones
  • Upside as never systematically explored
  • Continued infill and exploratory drilling

Puesto Morales/Rinconada, Argentina

  • 95,000 acres
  • Block contains Puesto Morales and Rinconada oil and natural gas fields
  • Extensive 3D seismic program completed in 2005, 2006, 2007, 2008
  • Waterflood underway
  • Treatment plant completed
  • Crude oil sales pipeline and natural gas sales pipeline completed
  • Independent reserves assessed at 17.8 million boe proved (1P), 25.6 million boe proved plus probable (2P) and 39.0 million boe prored plus probable plus possible (3P)

Fig. 3: Puesto Morales Stratigraphy


Fig. 4: Puesto Morales Pipelines and Discovery Wells


Fig. 5: Initial Discovery Well


Fig. 6: Puesto Morales Oil Facilities


Fig. 7: Puesto Morales – Current Waterflood Projects

  • Injection in SB/PR in North and Center Pools
  • Injection pilot in LM9 in North Pool
  • Injection pilot in LM10 in PMS field
  • 17 total injectors
  • Water injection rate reached facility capacity of 25,000 bw/d
  • Current production from waterflooding, 783 bo/d

Fig. 8: Puesto Morales – Incremental Waterflood Production Forecast


Fig. 9: Puesto Morales – LM Development

Puesto Morales Norte (LM9)

  • Primary Recovery Factor ~ 10 to 15%

Puesto Morales Sur(LM10)

  • Production flat at 80bopd over the last 30 years
  • 2007 Oil Reserve P1 @ 0.29 MMbo
  • Current Recovery Factor of 8-10%

General

  • Two waterflood pilot projects implemented (one in north for LM9, one in south for LM10)
  • With an increased recovery factor through the implementation of a waterflood and a reduction of well costs – aggressive development becomes attractive