TULSA, Okla., Dec. 2, 2010 /PRNewswire/ -- Apco Oil and Gas International Inc. (Nasdaq: APAGF) today announced that it has completed the first of a two-stage drilling commitment pursuant to the terms of its Coiron Amargo farm-in agreement announced earlier this year.
Under the agreement, Apco has earned a 22.5 percent interest for drilling two exploration wells in 2010. Coiron Amargo covers approximately 100,000 gross acres in Argentina's Neuquen Basin.
The terms also include an option for Apco to drill two more wells to increase its interest to a total of 45 percent. Apco has exercised this option, with drilling expected to be completed by mid-2011 or sooner, depending on rig availability.
"We're extremely pleased with the results of our first two wells. They confirmed that our geologic model for drilling exploration wells in this part of the Neuquen Basin is an excellent predictor of hydrocarbon accumulation," said Thomas Bueno, Apco's president and chief operating officer.
Apco's first two wells in Coiron Amargo both resulted in hydrocarbon discoveries in the Sierras Blancas formation, commonly known as the Tordillo formation.
The first well drilled on the larger of the two geologic structures, the Can x-3, has been put into production and is currently flowing at a rate of 100 barrels of oil per day along with some natural gas.
The second exploration well drilled, the Can x-1, encountered multiple productive zones in the Tordillo. It tested at flow rates ranging from 660 to 1,620 barrels of oil per day with 1.17 to 1.35 million cubic feet per day of natural gas, depending on choke size. The well has been put into production and is currently flowing 233 barrels of oil per day with some natural gas through a 4 millimeter choke.
Apco will continue to monitor the production performance of these wells to adequately assess the size of the resource. Cementing issues may have impacted the productivity of the Can x-3 well which will be observed while studies are conducted to better understand the productivity of the Tordillo at this location.
"After our expenditure commitment to investigate the Tordillo formation is complete, we and our partners plan to explore the Vaca Muerta Shale in Coiron Amargo, as well," Bueno said.
"The geologic data we have so far indicates that conditions required to potentially produce from the shale may exist in Coiron Amargo."
About Apco Oil and Gas International Inc. (NASDAQ: APAGF)
Apco Oil and Gas International Inc. is an international oil and gas exploration and production company with interests in nine oil and gas concessions and two exploration permits in Argentina, and two exploration and production contracts in Colombia. More information is available at www.apcooilandgas.com. Go to http://www.b2i.us/irpass.asp?BzID=1671&to=ea&s=0 to join our e-mail list.
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- Expansion and growth of our business and operations;
- Financial condition and liquidity;
- Business strategy;
- Estimates of proved gas and oil reserves;
- Reserve potential;
- Development drilling potential;
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Forward-looking statements are based on numerous assumptions, uncertainties and risks that could cause future events or results to be materially different from those stated or implied in this announcement. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following:
- Availability of supplies (including the uncertainties inherent in assessing, estimating, acquiring and developing future oil and natural gas reserves), market demand, volatility of prices, and the availability and cost of capital;
- Inflation, interest rates, fluctuation in foreign currency exchange rates, and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on our customers and suppliers);
- The strength and financial resources of our competitors;
- Development of alternative energy sources;
- The impact of operational and development hazards;
- Costs of, changes in, or the results of laws, government regulations (including proposed climate change legislation), environmental liabilities and litigation;
- Political conditions in Argentina, Colombia and other parts of the world;
- The failure to renew participation in hydrocarbon concessions granted by the Argentine government on reasonable terms;
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- Acts of terrorism; and
- Additional risks described in our filings with the Securities and Exchange Commission ("SEC").
Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. We disclaim any obligations to and do not intend to update the above list or to announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments.
In addition to causing our actual results to differ, the factors listed above may cause our intentions to change from those statements of intention set forth in this announcement. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise.
Investors are urged to closely consider the disclosures and risk factors in our annual report on Form 10-K filed with the SEC on Mar. 12, 2010, and our quarterly reports on Form 10-Q available from our offices or from our website at www.apcooilandgas.com.
SOURCE Apco Oil and Gas International Inc.