Parex Resources Inc., a company headquartered in Calgary, Alberta, participated in the June 2019 Agencia Nacional de Hidrocarburos (ANH) Permanent Process for the Assignment of Areas bid round and has been awarded two blocks on July 8.

Block LLA-94 is on trend with its Southern Casanare assets and the company has identified multiple play types through the existing 3-D seismic. Block VSM-25 is Parex’ first block in the under-explored Upper Magdalena basin targeting the Caballos Formation based on existing 2-D seismic.

Final contracts are expected to be signed in third-quarter 2019. The next ANH bid round is currently scheduled for later in 2019 and Parex expects to be an active participant.

The Boranda-2 exploration well (WI Parex 50%, Ecopetrol SA 50%) was drilled 1,200 m (3,937 ft) south-east from the Boranda-1 well in the Middle Magdalena Basin to evaluate the La Paz Formation. Within the targeted La Paz Formation, the well encountered over-pressured reservoir sands that are stratigraphically deeper and not present in the Boranda-1 well. An influx of hydrocarbons into the well-bore while drilling required the original Boranda-2 well to be abandoned and a sidetrack to be drilled.

The Boranda-2ST well was drilled to a total depth of 13,932 ft (4,246 m) and was tested over a 60 hour period under natural flowing conditions from the La Paz Formation. Over the test period a total of 2,397 barrels of 23 API oil and 75 bbls of water was recovered at an average production rate of 960 bbls of oil per day with a final watercut of less than 2%. Bottom hole pressure recorders indicated a stable producing drawdown of approximately 30% over the test period. The Boranda-2ST test rate is one of most prolific rates observed from the La Paz Formation in this area of the basin.

The well has been shut-in for pressure build-up analysis and we expect to resume production in late July 2019. Using the existing drilling pad, Parex expects to drill a follow-up appraisal well in 2019. Further delineation of the Boranda-2ST discovery will require additional surface locations to be built with further appraisal drilling expected in 2020.