C&C Energia Ltd.
TSX : CZE

April 07, 2011 09:15 ET

C&C Energia Ltd. Provides Operational Update

CALGARY, ALBERTA--(Marketwire - April 7, 2011) - C&C Energia Ltd. ("C&C Energia" or the "Corporation") (TSX:CZE) is pleased to provide an update on its 2011 operations.

Llanos Basin

The Zopilote-1 exploration well in the Cravoviejo Block (100% working interest) has been successfully drilled, cased and 2 zones have been tested. The Gacheta formation showed 20 ft. of net pay and the sands over the interval of 8,762 – 8,766 ft. were perforated and tested. Swabbing results yielded a flow rate of 800 bopd at a 0.2% BSW with an API of 17.3 degrees. A second test, of the Carbonera C5 formation, showed 37ft. of net pay and the sands over the interval of 7,927 – 7,934 ft. were perforated and tested. Natural flow at 355 psi on a 16/64 choke yielded a rate of 1,003 bopd at a 0.3% BSW with an API of 32.7 degrees. The well is currently being equipped to be a Carbonera C5 producer.

"The Zopilote well is very encouraging," said Richard Walls, President & CEO. "The well is the first exploratory test on the west side of Cravoviejo and there are 3 additional undrilled structures along the same fault system that we hope to test later this year and in 2012."

The Guacharaca-1 exploration well in the Cachicamo Block (30% working interest, subject to increase to 100% if the previously announced acquisition of the remaining 70% interest in the Cachicamo block is completed) has been successfully drilled, cased and 2 zones have been tested. The Gacheta formation showed 15 ft. of net pay and the sands over the interval of 8,129 – 8,134 ft. were perforated and tested. Jet pump testing yielded a flow rate of 114 bopd at a 43% BSW with an API of 27.7 degrees. A second test, of the Carbonera C7, formation showed 11 ft. of net pay and the sands over the interval of 7,242 – 7,252 ft. were perforated and tested. Jet pump testing yielded a flow rate 990 bopd at a 40.5% BSW with an API of 27.7 degrees. The well is currently being equipped to be a Carbonera C7 producer.

The Hoatzin Norte-3 appraisal well in the Cachicamo Block has been successfully drilled, cased and tested in the Carbonera C7 formation. The Carbonera C7 formation showed 22 ft. of net pay and the sands over the interval of 5,953 – 5,959 ft. and 5,962 – 5,966 ft. were perforated and tested. Natural flow yielded a rate of 530 bopd at a 5.0% BSW with an API of 26.3 degrees. The well is currently on production as a Carbonera C7 producer.

The Corporation has received all of its permits and plans to spud a well on the Asmodeo-1 prospect on the Pajaro Pinto Block (50% working interest, subject to increase to 100% if the previously announced acquisition of the remaining 50% interest in the Pajaro Pinto block is completed) during the week of April 11, 2011. The well will take approximately 22 days to reach TD of approximately 9,800 ft. C&C holds a 50% working interest and is the operator.

Middle Magdalena Valley

The Baco-1 exploration well on the Morpho block (50% working interest) in the Middle Magdalena Valley has been suspended after a long term production test. Testing of the 2 sand formations found in the well yielded formation water. Pressure data has been acquired and the wellbore is currently suspended pending further evaluation. C&C holds a 50% working interest and is the operator.

Production Update

As reported in the Corporation's February 28, 2011 press release, production in January and February 2011 was impacted by trucking and terminal offloading issues. As a result of these events, the Corporation was forced to shut-in approximately 29% of its production (approximately 2,000 bopd) in January and February due to high inventories in the field. C&C Energia has placed considerable attention to ensure production volumes move unabated. C&C has contracted additional trucks dedicated to move the Corporation's oil production to offloading points. As a result the disruptions experienced in January and February have been significantly reduced. Offloading terminals remain congested resulting in trucking standby charges and increased trucking distances but have had minimal impact on daily production volumes during March. C&C continues to monitor the situation to ensure any possibility of future disruptions and impacts are minimized. The Corporation is currently producing at approximately 7,100 bopd.

ABOUT C&C ENERGIA LTD.

The Corporation, through its subsidiary Grupo C&C Energia (Barbados) Ltd., is engaged in the exploration for, the development and production of, oil resources in Colombia. Its strategy is to develop producing oil assets by appraising and developing existing discoveries and exploring in areas assessed by management to be of low to moderate risk. With a total of nine blocks (seven operated) and over 586,000 net acres in Colombia, the Corporation's management expects that C&C Energia has considerable upside for future production and reserve growth.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This press release contains forward-looking information within the meaning of applicable Canadian securities laws that involves known and unknown risks and uncertainties. Forward-looking information typically contains statements with words such as "anticipate", "estimate", "expect", "potential", "could", "will", "plans" or similar words suggesting future outcomes. The Corporation cautions readers and prospective investors in the Corporation's securities to not place undue reliance on forward-looking information as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by C&C Energia.

Forward-looking information in this press release includes, but is not limited to, information concerning the expectations of the Corporation with respect to expectations of the Corporation's future production growth, the Corporation's drilling plans, plans and expectations regarding the completion of certain of the Corporation's wells and expected future production from such wells, and the Corporation's expectations regarding the resolution of certain production and delivery issues affecting its operations in the Llanos Basin and plans to address such issues in the future. These forward-looking statements are subject to assumptions regarding the Corporation's operations and the operating environment in Colombia. The Corporation's drilling and seismic plans are subject to change if circumstances change or if management of the Corporation determines that other business plans are more appropriate. The Corporation's expectations regarding the resolution of production issues in the Llanos Basin are subject to changes in circumstance or new developments that the Corporation cannot foresee.

Forward-looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated by C&C Energia including, but not limited to, general risks associated with the oil and gas industry (e.g. operational risks in exploration; inherent uncertainties in interpreting geological data; changes in plans with respect to exploration or capital expenditures; the uncertainty of estimates and projections in relation to costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with the negotiating with the ANH or with other third parties in countries other than Canada and the risk associated with international activity. The forward-looking information included in this news release is expressly qualified in its entirety by this cautionary statement. The forward-looking information included herein is made as of the date hereof and C&C Energia assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by law.

Contact Information

  • C&C Energia Ltd.
    Richard A. Walls
    President and Chief Executive Officer
    403-930-0114
    or
    C&C Energia Ltd.
    Ken Hillier
    Chief Financial Officer
    403-930-0120