Global Energy signals intent

Latin America focused oil explorer Global Energy Development (GED) has issued a development update, in which it sets out its objectives for the coming weeks.

Historically, Global has focused its efforts in the Llanos Basin, to the East of Colombia - this is where 70 per cent of Colombia's current oil production is derived. Though it has delivered the bulk of production for Global (95 per cent), the area suffers from high oil marketing costs, as well as restrictive access to the oil pipeline.

Global has one of the largest 2P reserves on AIM, but over 88 per cent of this is located in the Bocachico and Bolivar Contract areas within the Middle Magdalena valley. With this in mind, it has opted to up its efforts in both these locations. First up is Bocachico, where it is using a Canada developed technology known as CHOPS (Cold Heavy Oil Production with Sand) to go rework an old well site.

It has now mobilised a rig to help remove the existing sand screens and clean out the old well casing, which could take 14-20 days. The so called Torcaz 5 well was originally drilled in 1999, when it produced sustained rates of more than 300 bopd. Upon completion of the cleaning operation, Global will test the well to analyse sand production and install an abrasives tolerant pump this month. It is footing the $1.5 million cost using cash from its existing production.

In the Llanos Basin, it has been working hard to minimise the cost of water disposal. It hopes to re-commence production shortly, this time with lower water levels. In addition, it has secured the necessary environmental permits to convert its abandoned Rio Verde 2 well into a water disposal service - which should cut disposal costs from $5 to $1 a barrel.