Smart to delay drilling to 2HTariff increase coming in August...
Older press release..
The Corporation plans to drill a minimum of 4 additional development wells at Rancho Hermoso commencing late in the second quarter 2011. These new wells will target production from the Los Cuervos–Barco, Guadalupe, and Ubaque reservoirs.
The Corporation, through its 100% owned Colombian subsidiary Rancho Hermoso S.A., operates the Rancho Hermoso field under two Contracts with Ecopetrol S.A., those being 1) a Participation Contract in the Casanare Area whereby the Corporation receives 25% (after royalty) of gross production from the Los Cuervos–Barco, Guadalupe, and Ubaque reservoirs, with Ecopetrol S.A. receiving the remainder, and 2) a Risked Service Production Contract for the Mirador reservoir, whereby the Corporation is paid a tariff for each barrel of oil produced and Ecopetrol S.A. receives the oil. The current tariff is US $13.89 per barrel, which will escalate to US $17.36 per barrel in August 2011 through to the commercial life of the field.
JMHO