GeoPark Ltd. (NYSE: GPRK), on Aug. 20 announced the successful drilling and testing of the Jauke 1 exploration well in the Fell Block (GeoPark operated, 100% WI) in Chile.

GeoPark drilled and completed the Jauke 1 exploration well to a total depth of 9,592 ft (2,923 m). A production test through different chokes in the Springhill formation resulted in an average production rate of 5.8 million standard cubic feet per day of gas (or 970 barrels of oil equivalent per day) with a wellhead pressure of 2,738 pounds per square inch. Additional production history is required to determine stabilized flow rates of the well and the extent of the reservoir. Surface facilities are in place, the well is in production, and the gas is being sold to Methanex through a long term gas contract. Drilling and completion costs are estimated at $3.4 million, and at current gas prices and testing rates, this well is expected to have a payback period of six to seven months.

The Jauke gas field is part of the large Dicky geological structure in the Fell Block—and has the potential for multiple development drilling opportunities. Petrophysical analysis also indicates hydrocarbon potential in the shallower El Salto formation which will be tested in the future.

The Jauke exploration effort is part of GeoPark’s 2018 overall 40 to 45 well drilling program in Colombia, Argentina, Brazil, and Chile—with five drilling rigs currently in operation.

“In addition to the new gas production, revenues, reserves, and upside this new field will contribute to our bottom-line, we are pleased to congratulate our younger generation geoscience team for this new success – further demonstrating the depth and range of the long term oil-finding capacity being continuously developed within GeoPark,” James F. Park, GeoPark’s CEO, said.

Onshore