MercoPress. South Atlantic News Agency

Canadian company strikes oil in first of three exploratory wells in Neuquen basin

Canada’s Americas Petrogas and venture partner Gran Tierra Energy have made a “significant discovery of oil” in the first of three exploration wells on the Rinconada Norte block in the Neuquen Basin of Argentina.

Americas Petrogas said the RN x-1004 well flowed at a test rate of approximately 944 barrels per day of oil and 13,360 cubic metres per day of gas (79 barrels of oil equivalent) for a total of about 1,023 barrels of oil equivalent per day from two intervals tested separately in the Precuyo formation.

According to the Monday release the oil is 29.6 degrees API — sweet light crude similar to crude oil produced from the equivalent formation in Americas Petrogas' Medanito Sur block.

The company said the well has been completed and the service rig is now moving on to the next two wells, which have already been drilled and logged and had production casing installed.

“We are very excited about this new find on the first well of this three-well exploratory drilling program because of the strong production rates and possibility of significant commercial reserves,” said Guimar Vaca Coca, managing director of Americas Petrogas Argentina SA.

“We are also optimistic about the prospects for the remaining two wells.”

Americas Petrogas' wholly-owned Argentina subsidiary, Americas Petrogas Argentina S.A., is the operator of the Rinconada Norte block, holding a 65% working interest, while Gran Tierra Energy, through its Argentina subsidiary, holds a 35% working interest.

Americas Petrogas anticipates building test production facilities in the fourth quarter of 2011.

The Rinconada Norte block covers 96 sq km immediately south of Americas Petrogas’ Medanito Sur block in La Pampa Province in the eastern Neuquen basin