Pescod Interview with Krishna Vathyam PRESIDENT an Pescod Interview with Krishna Vathyam PRESIDENT and CEO with PETRODORADO ENERGY
PRESIDENT and CEO with PETRODORADO ENERGY
(As of August 9, 2012)
David Pescod: We are here with Krishna Vathyam and finally
celebrating a bit for Petrodorado Energy with two tidbits today.
Their major play CPO-5 – they finally got their licenses (we
hear nine months after the Colombian-imposed deadlines) so
why don’t you tell us a little about that play Krishna.
Krishna Vathyam: For the CPO 5 play it’s very close to some
very prolific producers in Colombia. 80% of Petrominerales
production comes from two blocks that are adjacent to CPO 5
(North West). We are going to drill our first two wells about 2
km away from some big discovery wells that ip’d at more
than 10,000 b/d. We are very close to this trend and we have
one fault corridor further southeast from the other discovered
wells. The area of the two blocks put together of
Petrominerales is 1/6 the area of our block, the CPO-5.
So we have a big land position and more importantly is that
we are pretty close to discoveries. There are multiple prospects
and each prospect has 3-4 stack sand prospectivity.
So that’s why it looks very attractive and we will be starting
our drilling program with two wells and based on the results
will drill more wells. So we are very excited about it.
DP: You have licenses for up to 45 wells, but none of these
wells can be considered “gimmees”?
KV: Yes they are exploration wells. The plus point of getting
licenses for 45 wells - if the first well is successful, we can
drill two development wells without needing any more permits.
That’s the plus side of it.
DP: Also in the news today, you announced that you spudded
your Dorados well. That is a much higher risk/reward
well though, isn’t it?
KV: Yes. It’s high risk in the conceptual sense. We drilled
one well in a prospect east of Dorados towards the end of
2010 and we discovered gas which could not sustain production,
but the primary target called “Caballos” wasn’t
reached because of gas kicks.
The presence of hydrocarbons is not the main risk from
our point of view; it is the quality of the reservoir which is
the risk because the “Caballo” formation has not been
proven in the neighborhood. So that is the risk associated
with it, but if it is successful, we are looking for light
oil and the size of the prospect is quite big – 20 million
barrels net to Petrodorado’s interest, and very close infrastructure.
So to convert a discovery into commerciality is
very, very quick.
DP: What is the new perception of working in Colombia?
It has been an unpleasant surprise how long it’s been to
get permits and most of the oil companies working in Colombia
have seen their shares get hammered over the last
while. Any thoughts on Colombia?
KV: They have issued a whole series of permits right now
along with us. Pacific Rubiales also announced a water
injection project has been approved, and Ecopetrol/
Talisman mentioned that they received their permit for
CPO-9 block which is south of our CPO-5. So it looks like
they batch released some permits, but from our point of
view, we haven’t seen a structural change.
I hope that structural changes have been made so that
these things are problems of the past, not of the future.
But I have to see it to believe it.
DP: What are your thoughts on the price of oil going forward?
KV: As usual I would say it will stay between $80 and
$100.
DP: Okay, last time we cornered you, you were picking
Bankers Petroleum (BNK) as your pick with a nice target by
Christmas. Any changes.
KV: No. Bankers is still a hold. And I also proposed Total
and it is already up from the day I proposed close to 15%
to 20%, yielding 6% in the meantime.