COLOMBIA : MATAMBO ASSOCIATION CONTRACT

The Matambo contract covers the Gigante field and surrounding area in the Upper Magdalena Valley.

Two exploration wells have been drilled in the contract area; the Gigante #1 well with a later deepening and sidetrack, Gigante #1A. The Gigante #1 well was drilled to approximately 13,400 feet in 1991, testing oil in the Tobo limestone which was considered to be non-commercial.  In 1998, the Gigante #1 well was deepened and sidetracked in the Gigante #1A well, drilled to approximately 15,800 feet and resulting in the discovery of the Gigante field.

Emerald retains exclusive exploration and production rights outside the Gigante field area without any additional work obligation.

Gigante field

The Gigante field was discovered by the Gigante #1A well in 1998. In 2002, Ecopetrol elected not to exercise its 50% back-in right in the Gigante field and Emerald elected for sole-risk field status. Emerald paid 100% of costs and had the right to benefit from 100% of production until the sole-risk reimbursable costs were recovered. In 2006 Ecopetrol exercised its right to elect for joint operations in the Gigante field. From mid 2007, costs and production have been shared with Ecopetrol on a 50:50 basis.

The Gigante sole risk exploitation area was initially defined by Ecopetrol as a drainage area around Gigante #1A well with a radius of 733 metres. In October 2007 Ecopetrol accepted the enlargement of the area to a radius of 1,038 metres based on updated reservoir and production information.  

During 2006 Gigante #1A well was worked over to replace the production tubing and was re-completed with an electrical submersible pump (ESP), replacing the previous hydraulic jet pump system and resulting in an increase in well production. Routine chemical treatments to inhibit the precipitation of asphaltene particles within the producing reservoir and to remove any emulsion blocks are carried out from time to time in order to improve oil production.

A 3D seismic acquisition programme has been completed across the Gigante field to assess the potential for further development drilling including Gigante #2. A "Play Schematic" showing the principal parameters involved in the generation and entrapment of oil at the Gigante field is shown below.

Exploration