GeoPark Limited, a leading independent Latin American oil and gas explorer, operator and consolidator with operations and growth platforms in Colombia, Peru, Argentina, Brazil and Chile, has announced its entry into Ecuador through the acquisition of the Espejo and Perico blocks.
The Espejo and Perico blocks are attractive, low-risk exploration blocks located in Sucumbíos Province in the north-eastern part of Ecuador, in the Oriente basin. The Espejo block covers an area of 15,650 acres (63 sq km) and the Perico block covers an area of 17,700 acres (72 sq km). Both blocks are covered with 3D seismic and are adjacent to multiple discoveries, producing fields and existing infrastructure.
From existing 3D seismic and other relevant data, more than five multilayer, ready-to-drill light oil prospects and leads have been identified. Ongoing geoscience evaluation and field operations are expected to start in late 2019 or early 2020.
The Oriente basin is one of the most prolific petroleum systems in Latin America, currently producing more than 500,000 bopd. It has access to infrastructure, with spare capacity, and a well-developed service industry.
The blocks were awarded to the GeoPark and Frontera consortium (50% GeoPark, 50% Frontera) in the form of production sharing contracts in the Intracampos Bid Round carried out on March 12, 2019 in Quito, Ecuador.
The winning bid consisted of committing a minimum investment program of carrying out 55 sq km of 3D seismic in the Espejo block and drilling four exploration wells in each block, with a total estimated investment commitment of $60 million ($30 million net to GeoPark) over the next four years. GeoPark and Frontera will have a 70-78% contractor share at approximately $60-70 Brent. The final award is contingent upon regulatory approvals and the execution of the contracts, expected for 2Q2019.
James F. Park, CEO of GeoPark, said: “Congratulations to the GeoPark team for again patiently, selectively, and successfully expanding our unique Latin America asset base with the acquisition of these new low-cost, low-risk, high potential blocks attractively positioned in the neighborhood of some prolific oil fields. Our entry into Ecuador gives GeoPark an exciting new platform in the country with the third largest reserves in Latin America and further advances one of our key long-term growth strategies tying together the common petroleum system of southern Colombia, Ecuador and northern Peru.”