28th Jul 2005 06:03
Adulis Resources Inc. ("Adulis" or the "the Company") - Colombian Operations Update CALGARY, July 28 /CNW/ - Adulis Resources Inc. (TSX-V:ADE; AIM: ADS), theColombian focused independent oil and gas exploration and production company,today announces an update on operations. Adulis operates in Colombia throughSolana Petroleum Exploration Colombia Limited ("Solana") , Adulis' whollyowned subsidiary. The drilling programme currently consists of twelve exploration wells,one development well and one re-completion of an undeveloped discovery. Two fold strategy Adulis is continuing to pursue a two fold strategy to achieve theCompany's goals of: 1. Pursuing high impact exploration ventures. 2. Undertaking low risk development and semi-development projects to provide early cash flow to fund additional initiatives, associated overhead and evaluation costs. As a result of this strategy the Company has participated in the drillingof four wells and one workover to date. In addition, two wells are currentlydrilling and at least seven wells will be drilled within the next twelvemonths. Guayuyaco Block The Guayuyaco Block is located in the Putumayo basin of southernColombia. The Block is operated by Argosy Energy International LLP, and Solanahas a 35% working interest, after Ecopetrol, the Colombian State oil company,exercises a 30% back in right. Guayuyaco 1 (G1) well - G1 continues to produce at approximately 950 Bopd. - G1 has already produced approximately 90,000 barrels, or US$4,000,000 worth of oil, since the end of February 2005. - The G1 well cost approximately $US4,400,000 to drill. Guayuyaco 2 (G2) well - G2 has been drilled to a measured depth of 8433 ft. (true vertical depth of 8022 ft. and a subsea depth of -7019) to a bottom hole location approximately 2290 ft. west and 128 ft. north of the G1 discovery well. This well was targeted at three reservoirs; the Lower U Sand, the T Sand and the Caballos Sand, all of which produced oil at the G1 well. - Logging operations have been completed and, based on preliminary interpretation the three target reservoirs came in 36 ft., 20 ft., and 24 ft. higher respectively than at G1. - A preliminary review of the log data indicates that the net oil pay in the Lower U, T, and Caballos sands is 51 ft., 60 ft. and 25 ft. respectively and this corresponds to 15 ft., 62. ft. and 15 ft. respectively at G1. Total net oil pay at G2 is interpreted to be approximately 136 ft. compared to 102 ft. at G1. - The well will now be completed and tested prior to being put on a long term flow test. - The G2 well was drilled from the G1 surface location and hence oil from both wells will be trucked approximately 5 kms to the Mary battery, pending the construction of a permanent pipeline that is expected to be installed by the end of 2005. Juanambu structure The Juanambu structure is located to the west of the Guayuyaco discovery. - Preparations are under way to conduct a combined 2D/3D seismic survey commencing in two months time. - The 3D data will be used to confirm the current mapping of the Juanambu structure. - The 2D data will assist in converting several existing leads into drillable prospects. - Juanambu is scheduled for drilling during the first quarter of 2006. Puma Well The Puma prospect is located in the Putumayo basin of south westernColombia. Adulis has an 18.75% profits interest and participates in thisproject under the terms of a Shared Risk Contract signed jointly withEcopetrol and Ramshorn (a subsidiary of Nabors Drilling). - Puma was spudded on July 14 and is currently drilling at approximately 4,000 ft. - The Puma well is programmed to a depth of 11,600 feet and is designed to test a large prospect on the downthrown side of a reverse fault. - The Puma well is located nearly 10km south of the Orito field which has produced more than 230 million barrels of 36 to 40 API. - The oil production at Orito is from a structural trap on the eastern or upthrown side of the fault which borders the Puma structure to the west. Bucaro Discovery The road to the Bucaro well, which tested 28 deg. API oil at ratesconsidered to be commercial as previously reported, has now been completed. Asite visit was conducted recently by Solana and Ministry of Environmentofficials in order to complete the process of making an application forapproval to begin oil trucking operations. Financial Update Adulis' consolidated working capital decreased from $58,678,428 (Cdn) atDecember 31, 2004 to $47,181,000 (Cdn) at May 31, 2005, largely due to thecash outflow related to the Company's exploration activities in the five monthperiod ended May 31, 2005. Adulis' net participation from Guayuyaco 1, which produced 57,000 Bbls toMay 31 2005, resulted in the Company receiving revenues amounting to$1,065,500 net of royalties. The Company's cash balances at May 31, 2005, amounting to $44,603,000 (Cdn) and $900,000 (Cdn) in restricted cash, are committed to theCompany's planned capital expenditure program in Colombia, which will resultin eight exploration wells and one development well to be drilled in theremainder of 2005 and the first quarter of 2006. The Company expects to havesufficient working capital to meet these commitments. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. For further information: Adulis Resources: Stephen Newton,stephentnewton(at)solanacolombia.com, +0057 1 629 1636; Ray Antony,ratony(at)telus.net, +00 403 266 7512; Pelham Public Relations: JamesHenderson, james.henderson(at)pelhampr.com, +4402077436673; Charles Vivian,charles.vivian(at)pelhampr.com, +4402077436672 (ADE. ADS) ENDADULIS RESOURCES INC.Related Shares:
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