A joint venture 54% controlled by British oil company Chaco Resources has won an exploration and production concession for the Puerto López Oeste block in Colombia's Llanos basin, Chaco said in a statement.
Puerto López Oeste covers 35,700ha to the immediate north of the Valdivia oilfield, which is presently producing over 3,000 barrels a day (b/d) of oil.
The approved work program for the block over the next 12 months is to reprocess and reinterpret the existing seismic lines in the block as well as to acquire 100km of new seismic data, Chaco said.
Puerto López lies on a trend with Valdivia and Chaco aims to locate a Valdivia look-alike through the seismic. If successful, Chaco would start drilling in the second year of the contract.
The partners in the joint venture are Colombian companies Expet and Consultoria Colombiana. Chaco will fund 100% of the US$1mn seismic program and the first exploration well in order to retain a 54% equity interest, the statement said.
In October, Chaco farmed into Spanish oil firm Repsol YPF's (NYSE: REP) stake in the Alea field in Colombia's Putumayo basin by funding certain appraisal operations to the tune of US$7.4mn in return for a 25% stake. Colombia's state oil company Ecopetrol operates the field.
The work that Chaco will fund includes reworking existing seismic coverage, reentering and testing an existing discovery well that flowed oil at 533b/d in 1988 and drilling a new step-out well to determine the size of the field.
Since then Chaco announced there could be 38.1 million barrels of recoverable oil at Alea in two plays.
Chaco Resources was previously known as Gold Mines of Sardinia. After changing its name it refocused on Latin American oil and gas and has operations in Colombia and Paraguay.