Update/guidanceHope this guidance isn't the same as past guidance, ie, totally worthless...
PETRO VISTA ANNOUNCES CASH ACCELERATION AND MANAGEMENT PROGRAM
PetroVista Energy Corp. has implemented a cash acceleration and cashmanagement program to meet its strategy of building shareholder valueby balancing production with exploration upside.
Amidst recentchallenges facing energy resource companies, this program focuses onmaturing Petro Vista's base of production opportunities and subsequentcash flow from its key assets, namely the Tartaruga Block (41.2 %working interest) and Morichito Block (100% working interest), in orderto fund its capital program continuing forward in 2009. The Company hasalso recently completed steps to efficiently conserve capital throughoverall cost reduction and re-allocation of existing capital to thosehigh grade exploration opportunities and assets (current and new)offering the most upside potential.
Exploration and Production Update
Brazil
TheTartaruga Block is located in the prolific Sergipe-Alagoas Basin, innorth-eastern Brazil, and has current average production ofapproximately 250 boe/d from one zone in one well with known additionalmultiple pay zones. Initial cash flow from the existing well atTartaruga provides Petro Vista with funds to cover general overhead andadministrative costs.
The Company will immediately undertake awork-over of the existing well to increase production by an estimated15 to 20%. At the end of December 2008, Petro Vista will deploy thePrest rig, secured from Petrobras, to drill the Tartaruga developmentwell (sidetrack), which is expected to be completed by Q1 2009. TheCompany's internal estimates indicate that the sidetrack well (drilledinto proven reservoirs in nearby analog fields and evaluated throughlog analysis in adjacent wells as pay sands), should produce net to theCompany 390 boe/d. All production on the Tartaruga Block is subject toa fixed price contract until March 2009 at US$133/boe. Production fromthe Tartargua development well is available to sell as early asFebruary since no additional facilities are required. With this initialwork, estimated production is expected to be approximately 529 boe/d byend of Q1 2009. Additional recompletions and development wells areenvisioned in the remainder of 2009 to continue to build up production.A Plan of Development for full field development has already beenapproved by the ANP, Brazil's regulatory body.
Colombia - Morichito Block
TheMorichito Block is located in the Llanos Basin, Colombia and comprises57,252 gross acres. The Company holds a 100% working interest and plansto drill the Morichito M2 discovery in December 2008. Following the M2completion, the Nabors 189 rig will be mobilized to drill twoexploration wells on the Block beginning Q1 2009. The Morichito M2production is a fast-track operation with initial pilot productionexpected in February 2009. The Company anticipates net production fromthe M2 completion well and the first exploration well (M1N) of 2,100boe/d (approximately 600 boe/d from the M2 completion and 1,500 boe/dfrom the M1N exploration well).
Furthermore, the Company hassecured a one-year extension with the Agencia Nacional de Hidrocarburos("ANH"), Colombia's regulatory agency, on its contract in Morichito inorder to provide flexibility on its drilling commitments. The extensionwill enable Petro Vista to defer exploration well obligations into Q3to Q4 of 2009 depending on capital and operational requirements.
The Morichito Block 3D seismic survey has been recently reprocessed and up to five drilling prospects have been identified.
Colombia - La Maye Block
PetroVista holds a 25% working interest in the La Maye Block situated in theLower Magdalena Basin. Under a turnkey contract with the ANH, theCompany has a total of up to four additional exploration wells plannedin 2009. Environmental and drilling permits are currently beingprepared for completion in the four locations. Approvals are expectedto be forthcoming and once obtained, a secured rig will be mobilizedfor drilling in Q2 2009. The timing of this project has been delayedfor two months subject to the ongoing regulatory submittal and approvalprocess. The approvals are expected to occur within the next 60 days.
Asset Rationalization Program
Aspart of our ongoing asset rationalization program, the Company hasterminated its Round 7, two-well drilling program in theSergipe-Alagoas Basin, onshore Brazil. Although interesting from anexploration standpoint, Blocks 413 and 428 exhibit less value than theTartaruga, Morichito and La Maye projects. The budgeted capital fromthis terminated program, approximately US$1,600,000, will be utilizedto advance production opportunities.
The Company continues toreview new ventures and other high potential assets in these same focusareas including high quality shallow water assets in Brazil's upcomingBid round where the Company's Management team has a successful trackrecord and state-of-the-art technologies.
© 2008 Canjex Publishing Ltd.