UK-listed Andes Energia has won preliminary rights to a trio of Colombian onshore blocks containing discoveries and that may be prospective for unconventional plays.
The explorer is being joined by Integra Oil & Gas at the three blocks, all of which are located in the prolific Llanos basin.
The initial licences are for 12 months, with the explorers holding an option to move to a second phase of two years. Although the contracts are preliminary at this stage, they may be firmed up in a month.
Andes would operate the blocks on 70%, with Integra on 30%.
The licences are for blocks YD Llanos 2, YD Llanos 5 and YD Llanos 8 in the Casanare and Meta departments of Colombia.
YD Llanos 2, where a discovery was made in 2011, covers 625 acres. The discovery well was tested at 600 barrels per day of oil from the Lower Sand 1 and 3 formations. It is currently shut in.
A discover on YD Llanos 5, which covers 17,000 acres, was made in 2008 and tested at 350 bpd from the Guadalupe formation. There is existing 2D and 3D seismic on the block.
YD Llanos 8 covers 1125 acres and the 2011 discovery well tested at 2400 bpd from the Lower Sand 1 formation before it was shut in due to mechanical problems.
“Part of the area covered by these blocks, according to the (Energy Information Administration), could have potential for unconventional production from the Gacheta formation, which constitutes the source rock of the prolific Llanos basin,” Andes said on Friday.
“The 2013 EIA report considers the Gacheta formation as one of the three potential shale source rocks in Colombia, with a thickness of 150 to 300 feet, an organic content of between 1% and 3%, appropriate thermal maturity and over-pressure.”
The contracts revealed by Andes include the right to exploit unconventionals, such as shale oil and shale gas.