Geopark receives final approval to acquire Morona Block in Peru

Latin American oil and gas company GeoPark has procured final regulatory approval for its acquisition of the Morona Block in Peru.

Geopark acquired a 75% working interest with operatorship of the Morona Block from the Peruvian state-owned company Petróleos del Perú through a Joint Investment and Operating Agreement on 1 October 2014.

The agreement received its final approval after the issuance of Supreme Decree 031-2016-MEM.

Covering an area of approximately 1.9 million acres, the Morona Block is located in the Marañón Basin and is known to have produced about one billion barrels of oil.

The block includes the Situche Central oil field, which has been delineated by two wells (with short term tests of approximately 2,400 barrels of oil per day (bopd) and 5,200bopd of 35°-36° API oil) and by 3D seismic.

Extensive geophysical surveys and exploration activities were conducted at the site, which has an operating field camp and logistics infrastructure. 

Independent reserve engineering firm DeGolyer & MacNaughton has certified 2P reserves of 40.2 million barrels of oil (mmbo) and 3P reserves of 82.9mmbo for the Situche Central oil field (at 100% WI) in the field.

The total Morona Block also includes vast potentiality with high impact prospects, as audited by Gaffney, Cline & Associates.

Under the agreement, GeoPark has committed to carry Petroperu on a work programme that will enable testing and start-up production of one of the existing wells in the field, subject to certain technical and economic conditions.

Expected capital expenditures in 2017 for the Morona Block are mainly related to facility maintenance and environmental and engineering studies.

GeoPark CEO James F. Park said: “We appreciate the support of the Peruvian government to advance the Morona Block and we very much look forward to partnering with Petroperu and the local communities in developing and exploring this exciting project.

“The Morona Block is the type of high-value project we look for in Latin America, with an already discovered big oil field and the opportunity to convert existing reserves into production and cash flows, combined with high-impact exploration potential in a proven and prolific hydrocarbon system.

“The timing and size of this project also fits very well within GeoPark’s existing high-quality portfolio of production and exploration assets across the region and represents an important piece of GeoPark’s ambitious medium-to-long-term growth plans.”