On December 4, 2012, the Corporation announced that the Agueda 1 ST well had encountered 70 feet of net oil pay within the C7, Lower Gacheta, and Ubaque reservoirs on its LLA 23 E&P contract located to the north of the Rancho Hermoso field in the Llanos Basin. The Lower Gacheta tested 1,832 gross bopd of light oil, and was placed on a long term production test. The Corporation has an 80% operated working interest in the contract and has plans to drill 2 to 3 development wells commencing in the first quarter of calendar 2013.
Effective December 20, 2012, the Corporation completed a 10:1 consolidation of its common shares.
For the three and six months ended December 31, 2012, the Corporation's production primarily consisted of crude oil and natural gas liquids from its Rancho Hermoso field in the Llanos Basin of Colombia. Over the second half of calendar 2012, the Corporation focused its efforts in Rancho Hermoso on higher netback non-tariff production versus low netback tariff production, which previously contributed a large percentage to the Corporation's total production. As a result, total corporate production for the three and six months ended December 31, 2012 was 5,354 boepd and 5,687 boepd, respectively, with only 26% (2011 - 65%) and 33% (2011 - 65%), respectively, representing low netback tariff production from Rancho Hermoso. This trend has continued into calendar 2013 and all remaining tariff production has been converted to non-tariff formations as of the date hereof after the last remaining producing Mirador well experienced a recent mechanical issue and was converted to non-tariff production from the Barco reservoir, which is currently producing 2,198 gross bopd (540 bopd net) with 21 percent water cut and 900 Mscfpd of associated gas. Overall production at the Rancho Hermoso field has now stabilized and consists entirely of higher netback non-tariff oil production. The Corporation is currently working over the RH 17 well to convert it from a high water cut Mirador producer to a higher netback Ubaque producer, and has plans to sequentially recomplete an additional 3 high water cut producers to lower water cut producers in the first half of calendar 2013.
With the completion of the Shona acquisition described above, the Corporation added a significant natural gas production asset to its portfolio. The Esperanza field, located in the Lower Magdelana Basin of Colombia, produces dry natural gas for sale to local customers under long-term contracts. Actual average daily production of the Esperanza field for the three and six months ended December 31, 2012 was 2,744 boepd and 2,757 boepd, respectively. However, since the acquisition of Shona was completed on December 21, 2012, the Esperanza field accounted for only 319 boepd and 160 boepd, respectively, of the Corporation's total production for the three and six months ended December 31, 2012. The Corporation has the ability to increase gas production volumes in the short term with no material additional capital required once additional sales contracts are secured. Effective February 8, 2013, the Corporation has executed an additional sales contract with a current buyer to formally increase contract volumes by approximately 5 MMcfpd (877 boepd) effective April 1, 2013.
During the three months ended December 31, 2012, the Corporation made a key light oil discovery on its LLA 23 block immediately adjacent to the Rancho Hermoso field. The initial well was completed and put onto production in early December 2012 and produced at an average net rate of 1,286 bopd for the month of December 2012. However, since production only commenced in December, the LLA 23 field accounted for only 433 bopd and 216 bopd net of the Corporation's total production for the three and six months ended December 31, 2012, respectively. The Corporation plans to drill up to 3 development wells into the discovery commencing in mid-March 2013 and has recently received the necessary environmental approvals for such.
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