Colombia
Las Quinchas Association Contract
- Las Quinchas Resource Corporation 50%
- Kappa Energy 50% (Operator)*
This block is located in Colombia’s prolific oil province of the Middle Magdalena Basin.
The Las Quinchas Association Contract has several heavy oil discoveries in the Lower Tertiary Sands Mugrosa reservoir: including Arce and Baul.
In 2007 another heavy oil discovery was made on the Acacia Este structure testing 101 bopd. An appraisal well was spudded late-December, 2007.
Woburn has completed all its obligations under the farm-in contract signed with the operator, in April 2005, in which it agreed to fund certain exploration drilling activities in order to earn a right to obtain, subject to approval, a 50% interest in the Contract. In early 2008, Woburn transferred its interests in Las Quinchas Association Contract to Las Quinchas Resource Corp. ("LQRC"), in which Woburn holds a 51% interest. Woburn has, therefore, a 25.5% working interest in the Las Quinchas Association Contract.
Fifty percent of the remaining acreage in the Las Quinchas Association Contract was proposed for relinquishment in 2009. Subject to approval by Ecopetrol, which has yet to be received, the Joint Venture retained 25,000 Hectares around Acacia Este, Arce, Baul and Bukhara, whilst relinquishing the less prospective and more risky sections in the NE of the Contract area. A further and final relinquishment was due in the summer of 2010 at which point all areas outside of producing fields or protected areas are due to be returned to the government. The Joint Venture is looking to retain the area around Acacia Este, Arce and Baul at a minimum. This retained area is a 5km protection zone around the defined commercial areas (Arce, Acacia Este and Baul, with the latter areas subject to approval by Ecopetrol), that are under long term production. If Ecopetrol asks for more work on Baul, the current phase could be extended by an additional year.
Acacia Este is a structurally complex, heavy oil field with substantial quantities of oil in place but with uncertain recoverability due to compartmentalisation. The Operator of the field has substantial experience of heavy oil developments and is currently producing over 100,000 BOPD from their Rubiales heavy oil field in the Llanos Basin in Colombia. Their knowledge and technical strengths therefore bodes well for long-term future of the Las Quinchas Association Contract. However, currently the costs of ongoing production operations in Las Quinchas are not sustainable for a single asset company and much work/investment will be required to resolve the technical issues of producing from Acacia Este in a commercially viable manner.
Woburn has recognised that it could be some time before there is any further progress on developing the Acacia Este field and therefore has decided that the existing invested funds could be better utilised on assets that would have a more immediate impact on the Company's financial condition and potential growth. It therefore is seeking a buyer for its interests in Las Quinchas Association Contract or in LQRC.
* Note that Kappa Energy Holdings Limited was acquired by Pacific Rubiales Energy Corporation of Canada (TSX: PRG) on 8 July 2008.
Colombia Technical Review 
Last revised September 2011
