Friday, March 4, 2011

ACIL: Colombia Oil Asset.

Kolkata, March 2, 2011:

Assam Company india Limited, a leading domestic conglomerate engaged in diverse sectors like tea plantation, oil and gas exploration and production and infrastruvutre, today annouced that the company has entered into a farm out aggrement with Sismopetrol and R3 in colombia, for exploration and production of the block for an undisclosed amount at ANH EI Triunfo('the Block') located in casanare, colombia.

Agreement Details:

As per the aggreement ACIL will acquire a 70% working interest in the block and sismopetrol and R3 will retain the balance 30% share.

The block size is 10,200 hectares and contains one discovery well (La Cabana).The work at the block is expected to begin early July this year and production of oil should commence from Novemeber, 2011 onwards. The farmout agreement provides for ACIL to be the operator of the block, wherein ACIL will pay 100% of the drilling and initial testing costs of the Phase 5 commitment well in the block.

The Block is located in the profilic Lianos basin, less than 20 kilometers from the Colombia's largest discovered field operated by British Petroleum.

The geological setup of the area is comparable to that prevailing in Assam shelf, in the northeast india. The company is expected to drill one well in phase five to 16,500 feet maximum depth, which is expected to cost between $10-$15 million per well. The company estimates the un-risked resource potential (recoverable) from the Block to be between 10 to 30 MM barrels.

Growth Plans:

With plans to increase its presence and portfolio on Colombia ACIL has already approached and initiated discussions wth a leading colombian player for assisting and partnering into future projects.

Management Comment:

On annoucing the aggrement, L.B. Kondratoff, Chief operating Officer, ACIL - Oil & Gas Project, commented that, "Growth in out oil and gas division is anticipated to be significant in 2011. This entry into the Colombian market is an exciting opportunity which fits well into our overall objective and strategy for the Future".

Courtesy: NSE, BSE

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