EPI’s core business is the exploration and production of oil and gas in the upstream oil and gas sector. Currently, the Group has oil-producing assets in Argentina (the “Argentinian Assets”). The Argentinian Assets were acquired in 2009 and are located in the Puesto Pozo Cercado area and Chañares Herrados area at Cuyana Basin, which is approximately 50 kilometers south of Mendoza, the capital city of Mendoza Province in Argentina. It is at this Project Site that our ‘Mendoza Oilfield Project’ commenced in November 2009. As of December 31st, 2012, EPI has 10 oil wells that have been drilled at the Project Site.
|Project Area:||Puesto Pozo Cercado area and Chañares Herrados area encompass 169 square kilometers and 40 square kilometers respectively.|
|Project Start Date:||November 2009|
|Exploitation Rights:||In July 2011, Chañares were granted an extension of their exploitation rights, which allow these EPI subsidiaries to explore for oil and gas at the Project Site until the year 2027. These exploitation rights are renewable when they become due in 2027.|
|Current Status:||A total of 10 oil wells are in production. Out of these 10 oil wells, 5 were drilled by Have Result, for which EPI is entitled to a 51% interest on production. The other 5 oil wells were drilled by EP Energy, for which EPI is entitled to a 72% interest on production.|
The petroleum that is produced by EPI is sold to its customers Repsol-YPF at prices that are set by the Argentinian government.
During 2012, EPI has performed 7 workover jobs to the oil wells and has also invested in its own centralized well fluid collection tank and collection pipeline. The overall results of the 7 workover jobs are satisfactory as there was an increase in the initial production after the workover jobs were completed, which is better than expected.
|Oil Well||Status||Depth (m)||Date of production|
|CH – 1052||In production||3697||26 Nov 2009|
|CH – 1053||In production||3580||8 Dec 2009|
|CH – 1055||In production||3600||25 Mar 2010|
|CH – 25 bis||In production||4685||12 May 2010|
|CH – 7 bis||In production||4200||14 Aug 2010|
|CH – 1059||In production||3600||9 Jul 2011|
|CH – 1068||In production||3600||17 Aug 2011|
|CH – 1063||In production||3600||28 Sept 2011|
|CH – 1066||In production||3600||1 Jan 2012|
|CH – 1082||In production||3600||10 Jan 2012|
The above chart provides key information regarding the date at which each of our oil well started producing petroleum. As shown in this chart, EPI’s first oil well CH-1052 started producing petroleum on November 26th, 2009. EPI’s most recent production is at oil well CH-1082, which started producing petroleum on January 10th, 2012.
The contingent oil resources in certain shallow reservoirs of our Argentinian Assets are as follows:
Contingent Oil Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations t, but which are not yet considered mature enough for commercial development due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets.
The above EPI’s Oil Resources and Reserves Chart was assessed by Roma Oil and Mining Associated Limited as of 19 March 2013 from the Resource Estimation Review Report issued at the Project Site in the City of Mendoza, Mendoza Province, Argentina.*Low Estimate of contingent resources = 1C