Petroamerica (PTA-TSXv) has confirmed an oil discovery in the Balay-1 exploration well in the prolific Llanos Basin of Colombia. The well tested at a stabilized rate of 1,314 bbl/d of 28o API oil, and testing operations will continue. Petroamerica's 15% working interest means their net production from this well is 197 bopd.
This is a significant catalyst for PTA.. It's the first production for the company, and at 175 square miles, the Balay block has room for a lot of wells. The Balay block is adjacent to the prolific Corcel field, where wells have produced 6000-15000 bopd.
These new discoveries are the reason that Colombia is increasing production -- currently about 660,000 barrels of oil flow out of Colombia every day.
Petroamerica's 175 sq mile tract is sitting right in the heart of the action. The risk in this large project is reduced by the presence of veteran Latin American oil partners like Petrobras, the operator.
Petrobras is -- depending on the day -- the largest company in Latin America. They are an integrated oil producer -- meaning they drill for oil and have their own refineries and gas stations -- and has daily worldwide production of about 2 million barrels of oil per day.
The discovery of oil on the first drilled well on the PTA properties is a catalyst event which is likely to trigger the opening of additional drilling prospects. Petroamerica has yet to say what follow up drilling plans are.
