International Sovereign Energy Corp.
TSX : ISR

International Sovereign Energy Corp.

December 12, 2006 10:41 ET

International Sovereign Energy Corp.: Charapa Oil Concession Ecuador Agreement Approved

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 12, 2006) - International Sovereign Energy Corp. (TSX:ISR) (the "Company") is pleased to report that negotiations with the Ecuadorian National Oil Company have been successfully completed to modify the Charapa Concession Agreement and that an Addendum to the Agreement incorporating the terms of the modifications including a revised work program has been approved.

Charapa Concession Summary

- The Charapa Block is located in the North of Ecuador's Oriente Basin on the Colombian border and 15 Kms N.W. of the producing Lago Agrio Field which has produced 145 million barrels of light oil since 1972, primarily from the cretaceous Hollin formation.

- The Charapa Field has two Lower Cretaceous reservoirs: the Hollin sandstones, which is the producing zone in the Lago Agrio Field and the NAPO Formation Caliza 'B' fractured limestones.

- Cumulative past production from the Charapa Field was some 1.694 million barrels of oil primarily from the Caliza 'B' reservoir. An independent report has attributed up to 38 million barrels of light oil in place in the Hollin formation with a recoverable potential in excess of 9 million barrels. A transient test done by Schlumberger in 2001 on the Charapa discovery well indicated production rates could be achieved from vertical wells if skin damage could be eliminated.

- The Charapa Block also contains three (3) untested structures namely Conejo, Charapa S.W., and Halcon. The three structures are reviewed below.

(I) Conejo: The Conejo structure is seismically defined and is located some 16 Kms to the West of the Charapa Field. The Conejo structure is bordered to the East by the same pronounced reverse fault that sets up the producing San Miguel/Acae Field located 6 Kms to the North across the Colombian border. A vertical well for purposes of evaluating the Conejo structure for reserves is planned.

(II) Charapa S.W.: Charapa S.W. is a seismically defined feature 5 Kms to the Southwest of the Charapa Field. This structure will be evaluated seismically as part of a 50 Sq. Km 3-D survey.

(III) Halcon: The Halcon structure is located in the Southwest portion of the Concession. This structure will also be evaluated by the planned 3-D seismic program.

A work guarantee bond of US $2.4 million is in place. The bond will reduce progressively against completion of the agreed expenditures. The revised Charapa work program totals $10.0 million and the production split with the National Oil Company is approximately 50:50.

As previously reported the Company has an option Agreement to acquire 100% of the shares of a private company which, through its wholly owned subsidiary, is the contracting party to the Charapa Concession contract or, at the Company's election, to have assigned to the Company 100% of the shares of the subsidiary subject to a 1.5% overriding royalty payable on the Charapa operator's net participating interest pursuant to the Charapa Concession Agreement and all amendments thereto and after transportation of oil to the point of sale. A finders fee to an arm's length party is payable on this transaction.

International Sovereign Energy Corp. is an oil and gas exploration development and production company with offices in Vancouver, British Columbia, Calgary, Alberta and Islamabad, Pakistan and is active in the exploration and development of hydrocarbon reserves in Western Canada and internationally.

Certain information provided in this press release contains forward-looking statements that by their nature are subject to numerous risks and uncertainties and readers are cautioned that actual results may vary considerably from those forecasted.

Shares Outstanding: 13,253,796

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • International Sovereign Energy Corp.
    Omair Choudhry
    Chief Financial Officer
    (604) 684-7372
    (604) 684-2407 (FAX)
    Website: www.isove.com