By Martin Clark
Any upstream find, whatever the prevailing economic climate or oil price, is welcome news in the ears of investors.And TSX-listed Pacific Rubiales Energy Corporation certainly did not disappoint this week.
The Canadian company announced that it had identified a 213 metre gross oil column that confirms an important new light oil discovery in Brazil’s offshore Santos Basin.For any company, this is a major upstream basin to be playing in, although Pacific Rubiales has already cut its teeth and proved its mettle in the field elsewhere.
It is now a leading producer in Latin America, with a diversified portfolio of assets spanning around 90 exploration and production blocks.These cover pretty much every part of the continent from Colombia, Peru and Guatemala, through to Guyana, Belize and, of course, Brazil.
The only point of interest away from this core territory is some frontier work in Papua New Guinea, half a world away.With production also on the rise, things are looking healthy.
Last month, the company announced its fourth quarter and year-end 2014 results stating that net production for the year reached 147,423 barrels of oil equivalent per day (boepd), an increase of 14 percent compared to 2013.
At the same time, it also announced a reduction in total operating costs by US$2.67 per boe to US$30.51 boe for the year, mitigating the impact from lower prices.And the latest oil find in the high profile Santos basin is not going to do the company’s prospects any harm at all.
In an April 20 statement, Pacific Rubiales announced that the oil column had been confirmed in the Echidna-1 exploration well from wireline pressure data measured across the Paleocene and Maastrichtian aged reservoir intervals.
Oil samples recovered on wireline measured 39.5° API light oil.The well reached the planned total depth of 2,379 metres at the beginning of the month, the company noted.
The Echidna prospect is located in Block S-M-1102, approximately 20 km north-east of Kangaroo on the eastern flank of a salt diapir in a similar geological setting to the Kangaroo oil discovery.
Pacific Rubiales has a 35 percent participating interest in the block with operator Karoon Gas Australia holding the remainder.“Echidna adds to the recoverable oil potential of this offshore block and represents another significant achievement for ourselves and our partner and is expected to add further exploration upside value to the company,” said Pacific Rubiales president, José Francisco Arata
As well as the Toronto Stock Exchange, Pacific Rubiales shares are also traded on La Bolsa de Valores de Colombia.