The existing 2-D seismic coverage of 700km provides regional control and has identified numerous lower Tertiary and Cretaceous structural and stratigraphic leads at drilling depths of between 1,500m and 2,500m.
Subsurface control is provided by seventeen previously drilled wells, which indicate the presence of reservoir, source and seal rock at multiple horizons.
Sixteen of these wells reported oil and gas shows, with one flowing medium gravity oil at rates of up to 350bopd on extended test.
Based on reserve records of the Secretaria de Energia of Argentina, producing oil fields adjacent to and on trend with the Cerro los Leones Licence typically have ultimate recovery estimates of between 15 and 30 million barrels, with up to 500,000 barrels per well.
Antrim will apply for inclusion of production from the Cerro los Leones concession in the Gas and Oil Plus incentive programs in Argentina, which provide for higher prices than other Argentine production earns.
The concession provides for a state royalty of 16% and carries an obligation to the government to acquire seismic data and drill up to five wells during a three year exploration period.
The cost of the work commitment to the province is valued at $13.85m ($6.94m net to Antrim).
Antrim’s interest in the block is being acquired from a private Argentine company, and the terms of the acquisition include a re-imbursement of approximately $1m of exploration and permit expenses and for the payment to the vendor of a 2.5% gross overriding royalty.
Antrim is currently working on obtaining the necessary environmental approvals to shoot a 3-D seismic program in the first half of 2011, and up to two exploration wells are planned for the latter part of 2011.
The concession is being acquired jointly with a Canadian exploration and development company and it is the intent of both parties to enter into a joint venture agreement to manage activities on the property.
Antrim’s portion of the acquisition, and seismic and drilling program will be fully funded utilizing cash and free cash flow from the company’s existing Argentina operations.
