Blue Creek Project, Belize
The Blue Creek Project lies in the hydrocarbon producing Petén Basin that extends across northern Guatemala into northern Belize and southeast Mexico.
The Project is located due east from the Xan (300 MMbo) and Chocop oil fields of northwest Guatemala and north of the recently discovered Spanish Lookout and Never Delays oil fields belonging to Belize Natural Energy Ltd. Both have reported reserves in the range of 25MMbbls and are thought to be geologically similar to the prospects developed on the Blue Creek Project. In addition, the Government of Belize recently announced a discovery, still under evaluation, on the Maranco block immediately to the south of the Blue Creek project. The seismic interpretation undertaken by the Company points to very similar subsurface trap style of the nearby Spanish Lookout Field. Analysis of live oil samples from intervals between 6,300 ft to 10,490 ft in the Blue Creek # 2 well reveal there are multiple oils derived from different source rocks, including oil very similar to that produced from the Spanish Lookout field (API 38°) as well as oils similar to that found in Rubelstanto, Caribe and Tierra Blanca oil fields in Guatemala.
2012 saw the commencement of a drilling programme in Belize. The Blue Creek#2, Blue Creek#2A and Rio Bravo#1 wells were drilled to test two structures. Encouragingly, all three wells encountered hydrocarbons in both structures over the entire objective interval. The wells, therefore, demonstrate the presence of an active hydrocarbon system on New World’s licence area. Furthermore, nearly all porous dolomite intervals were found to be oil-bearing and in some zones, free live oil was observed. However, no commercial accumulations were identified, due to high water saturations. It is noteworthy that these two drilled prospects as well as the prospect in the adjacent licence area are all located in separate fault blocks, and, from an oil accumulation and geologic standpoint, are independent of each other. As a result, the Directors believe each structure is unique in its geologic evolution, factoring in all the elements of a working hydrocarbon system and hydrocarbon charge characteristics.
The seismic and drilling programme to date has significantly de-risked the Blue Creek Project as mentioned above. The abundance of traces and shows of oil and gas in the recently drilled wells shows that up-dip migration from the source rocks is taking place through the Blue Creek licence area. Clearly, hydrocarbon migration pathways formed by porous dolostone sequences, fracture systems and through leaky fault planes are present in the licence area and the adjacent licence where a recent discovery has been made by a neighbouring oil company.
Following a meeting with the Minister of Energy in Belize in October 2015, the Company negotiated a 12 month extension to its Production Sharing Agreement (“PSA”). The PSA will now terminate on 31 October 2016. While the expiry date of the PSA is extended, the approval restricts the Group’s future activity to areas high-graded by New World Oil and Gas (Belize Operations) Ltd. (the PSA holder and a subsidiary of the Company) in its extension application and areas identified as viable drilling targets by the seismic programme conducted in 2012-2013 – namely the A and C South and C North Prospects.
The Group is actively looking for a farm-in partner for the Blue Creek PSA to reduce costs and help de-risk the Project. Once a farm-in partner has been sourced, the Group intends to drill a well on the C Prospect. Previous wells drilled by New World derisked the acreage and provide a better understanding of the critical factors for success – trap definition and trap timing.
A suitable well location for Prospect C has been identified and an outline drilling plan prepared along with cost analysis in preparation for a farm-in partner being secured.