Field Type

The Puesto Guardian Concession is located in the Noroeste Basin in NW Argentina and includes five main fields Puesto Guardian, Dos Puntitas, Pozo Escondido, Canada Grande and Martinez del Tineo.

A productive concession with five active fields and a variety of different reservoirs, such as the prolific Yacoraite A6 aeolian sand and intervals of primary-secondary porosity in the Cretaceous Yacoraite-Las Avispas Limestones. Recent integrated studies performed by Molecular Energies PLC have provided crucial insight unlock the key factors that control the oil accumulations and explain the intermittent successes from the historic original operator.

History

The fields were originally discovered by YPF in 1937 and the concession was awarded to a consortium in 1991 as part of the privatisation of YPF. Whilst a total of 115 wells have been drilled in the fields (resulting in a peak production of 9,000 bopd during the early 1980’s), only three wells have been drilled since the current Concession was awarded in 1991 and production has remained on a very slow decline, reaching 1100 bopd in 1994. In 2005, 344 km² of 3D seismic data was acquired over three of the fields, but low oil prices and other factors have meant that only limited activity has been undertaken since.

Today

When the field was acquired, the facilities and operation had deteriorated and the field was not making a return at the operating level.

Since taking control of the field, Molecular Energies PLC has invested in:

• Optimizing the field operations
• Performed workover and acidification campaigns
• Modernized the management of the two production batteries
• Converted the primary lifting method to jet pumps.

The result is that the field production has stabilized around 400 bopd while providing positive net back. 14 wells are currently producing within the Puesto Guardian concession, with 2 wells acting as water injectors. The production of light sweet crude production is trucked to a local refinery in the region.

Outlook

As of 20 January 2021, the Company, in discussions with the Salta Province, is considering drilling two or three vertical oil wells in the currently producing Dos Puntitas field within Puesto Guardian in H2 2021. In order to save time, locations have been identified internally and applications to drill in progress.

Projected initial production for each of these wells is estimated at 45-50 m³/d (300 boepd) with a drilling time of 35 days per well. It is anticipated that a further announcement will be made at or around the end of April 2021, once a final decision has been made and the Company has more precise details available as to costs and time scheduling.

Consideration is also being given to complement the contemplated drilling by acquiring 3D seismic data over the formerly producing Canada Grande and currently producing Puesto Guardian fields later this year as well as some additional 2D data in the Ocultar exploration block. The seismic grid has already been determined. The next step is to commence a tender process for contractors and complete financial modelling for review.

Canada Grande was a prolific producing field in the history of the Concession with the more successful wells demonstrating initial flow rates of 1,000 bopd. All wells in this field were drilled solely relying on 2D seismic. It is considered that acquiring modern 3D seismic data will assist in identifying undrained areas within the field as well as defining and stepping out from its boundaries. Similarly, acquiring 3D seismic over the Puesto Guardian field where initial production rates were 600 bopd is considered a prudent and potentially rewarding action. Any follow on drilling in Salta arising from the results of this seismic acquisition will likely be in 2022.

In January 2022, Molecular Energies PLC announced that the non-producing exploration areas of Matorras and Ocultar have, with the consent of the Province of Salta, been relinquished and the work commitments transferred to the producing Puesto Guardian Concession.

The transfer of the work commitments to Puesto Guardian totalling in value US$2.61m, is approximately the cost of one production well in addition to the current three well programme. Accordingly, this means that the Company has exchanged non-drilling exploration dollar commitments for a further production well which it fully intends to drill in a known producing area, thereby generating royalties for the Province and revenue for the Company whilst permitting the Province to re-market the exploration Blocks.