The company completed a joint development agreement with CIUDEN for the research, testing and implementation of carbon dioxide (CO2) sequestration pilot sites within LGO’s Spain acreage.
The seismic program at Hontomin is the first program to be executed under the agreement. The program will conduct both ultra-sensitive and 3D seismic surveys over an area of approximately 10sqkm centred on the Hontomin reservoir and shall continue until August 2010. The cost of the survey is approximately EUR3m, which is wholly funded by CIUDEN.
The terms of the joint development agreement with CIUDEN provide for the full bi-lateral sharing of results and data from all programs executed by LGO and CIUDEN.
LGO anticipates mobilizing to Hontomin 2 in July to drill out the well cement plugs and prepare the well for a extended well test program to assess the production potential of the Hontomin reservoir. All the necessary permits have been granted by the Spanish government authorities and the majority of the site works have been completed for the program.
Hontomin has mean contingent oil resources of 0.36mmbo. The oil production from Hontomin 2 will be transported 38km to the company’s central processing and sales facility at Ayoluengo, and will provide additional revenues to the Spanish operations.
