PentaNova Energy Corp. [PNO-TSXV], a company backed by Canadian resource financier Frank Giustra and Goldcorp [G-TSX; NYSE-GG] Chairman Ian Telfer, on Tuesday April 3 released an update on gas drilling in Colombia, South America.
The company said the update is a response to negative trading in the shares since a news release about the Colombia well (known as Istanbul-1) on March 28, 2018.
The move seemed to calm investors and sent the stock up 40.7% or $0.055 to $19 cents. Trading volume of 2.73 million shares made PentaNova the most actively traded stock on the TSX Venture Exchange on Tuesday morning.
In the March 28 press release, PentaNova said the Istanbul-1 well, spud on February 27, 2018, in the Maria Conchita block, has completed drilling to a total depth of 8,740 feet. It also said a seven-inch liner has been run and cemented.
The company said it will perforate and complete the well over the next week and then proceed to testing over a two-week period. It will then provide a full update once testing is completed and analyzed.
However, since that announcement, the stock eased from 21 cents to a low of 13 cents on April 2, 2018.
Tuesday’s return to 21 cents came after the company said it wanted to clarify both the drilling results and the factors surrounding testing of the Istanbul-1 well.
The clarification reiterated the earlier announcement, stating that the well commenced drilling on February 27, 2018, and reached a total depth of 8,740 feet measured depth on March 21.
The company went on to say that when drilling through potential reservoirs of the Jimol formation, the same formation that tested a combined rate of 18 million cubic feet per day of gas in the Aruchara-1 discovery well, gas shows were observed on the mud log.
Open hole logs run between March 21st and March 24 revealed 88.5 feet of low resistivity, potential gas-bearing sands with an average porosity of 20.3%. During logging, 32 sidewall core plugs were cut and recovered, the analysis of which supports the interpretation of favourable reserve properties for the potential gas-bearing reservoir intervals identified on the logs.
The company went on to say that once the testing of the well has been completed, the company will provide a full and comprehensive update on the results of the test.
PentaNova Energy is working to develop oil and natural gas fields that it has acquired in areas surrounding some of the key energy producing regions in Colombia and Argentina. The company is involved in four projects in Argentina. They include a partnership with YPF (Argentina’s state oil company) on the Llancanelo heavy oil project.
In Argentina, the company is hoping to capitalize on a more business friendly environment under the new administration headed by President Mauricio Macri.
In Colombia, the company is involved in three projects. The Maria Conchita block is close to Colombia’s largest gas producing field and its infrastructure.
Neighbouring wells on the block, the Aruchara-1 drilled in 1980 by Texaco and the Tinka-1 drilled in 1988 by Ecopetrol, were tested at rates of 18 million cubic feet per day of gas and 3 million cubic feet respectively.
Colombia’s most significant source of gas production, the 6 TCF Chuchupa field, is located approximately 50 km northeast of the company’s newly spudded Istanbul-1 well.
PentaNova Chairman Serafino Iacono has extensive experience with heavy oil projects, most notably leading Pacific Rubiales to develop the Rubiales heavy oil fields in Colombia from 9,000 barrels of oil per day to 300,000 barrels of oil per day. Pacific Rubiales has since morphed into a company now called Frontera Energy Co. [FEC-TSX].