The company said that it is encouraged by the presence of 36 degree API oil in the over-pressured C-12 reservoir, which was encountered in a structurally higher position relative to surrounding wells. At this time the company cannot speculate as to how large and accumulation may have been found as this will require testing and independent engineering evaluation.
The Atzam #3A well encountered the top of the C-12 member of the upper Coban formation at 1330ft, approximately 330ft higher than in Atzam #2 and 650ft higher than in Atzam #1A. The reservoir section of the C-12 in Atzam #3A is comprised of a series of thin dolomite beds with approximately 20ft of potential net oil pay as determined by Schlumberger carbonate advisor Elan petrophysical interpretation.
While open-hole logging with 11.6 pound per gallon mud, the well flowed four barrels per hour with approximately 50% drilling mud and 50% 36 degree API oil. The perforating and testing of the C-12 is expected to be conducted in approximately 2 weeks time, utilizing the company owned service rig.
Quetzal is currently evaluating the drilling of Atzam #4 as an offsetting well to a depth of 4,000ft to evaluate the oil potential down to and including the Coban C-19. The higher structure encountered at the Atzam #3A C-12 level, suggests in the company’s opinion, that deeper reservoirs originally targeted by Atzam #3A may also be structurally high and oil bearing.
The Atzam #3A development well had a planned total depth of 4,300ft and targeted the C-18 and C-19 members of the Coban formation, which is a prolific oil producer within the Peten basin of Guatemala. The well was spudded in February 2010, and reached total of 1,812ft measured depth on April 12, 2010, the company said.
According to the company, while drilling Atzam #3A, it experienced a number of mechanical and technical challenges. These included unexpected over-pressured intervals causing oil and water to enter the well-bore, a mud system not suited to handling a weighted mud for an extended period of time, getting stuck in the hole after not being able to circulate for a number of days due to a burst Kelly hose, fishing to retrieve stuck drilling equipment and leaving a 228ft fish in the hole.
Quetzal evaluated several options as how to best proceed. It was determined that casing and testing the significant C-12 oil potential was preferable to continue drilling operations by whip-stocking around the fish.
In response to the drilling challenges experienced in Atzam #3A, the company will modify the drilling program and some of the drilling equipment on the company owned rig before drilling Atzam #4 well, the company said.
