The Corporation has a 100% working interest in this block which is 69,061 acres in size. The Cravoviejo Fields lie adjacent to southwest-northeast trending faults that dip to the east. The Carrizales, North Bastidas and South Bastidas Fields occur along one such fault with 130 feet of throw. The Matemarrano and Gemar Fields are trapped against another fault to the west. The fields are characterized by multiple, productive horizons between 7,300 and 8,500 feet and produce 14° to 34° API oil from up to five reservoirs.
In 2006 and 2008, the Corporation acquired a total of 229 km2 of 3D seismic data on the Cravoviejo block. The Corporation initially drilled three successful exploratory wells on separate structures in the Cravoviejo block between March and June 2007. Completion and testing of these wells continued through to October 2007 when all three wells went on production. The Corporation drilled twelve exploration and appraisal wells on the Cravoviejo block in 2008. Drilling resumed in November 2009 and to date the Company has drilled eight additional wells on the Cravoviejo block. The Corporation has made five separate discoveries in the Cravoviejo block.
The Corporation’s second quarter 2010 production on the Cravoviejo block averaged approximately 5,320 bbls/d. According to the Lonquist Reserve Report, proved and probable reserves as at December 31, 2009 on the Cravoviejo block were 11.0 million bbls.
In addition to the currently discovered reserves on the Cravoviejo block, management believes that there are additional reserves that remain to be targeted on the Cravoviejo block. In addition to the Carrizales and Matemarrano faults, the Corporation has identified on 3D seismic data two additional faults located in the western half of the Cravoviejo block. Management plans to drill both of these prospects in 2011.
The Corporation plans to commence construction on a centralized production facility on the Cravoviejo block in the fourth quarter of 2010, with anticipated start-up in the second quarter of 2011. This facility will initially be capable of handling over 120,000 barrels of total fluids per day and the Corporation expects that this will reduce production costs at Cravoviejo by 20 to 30% by mid-2011. Cost savings will come by way of improved water handling, reduced diesel fuel consumption, decreased rental costs and labor efficiencies.