NAUT.L Regulatory News (NAUT)

23 Nov 2005 07:02

Global Energy Development PLC23 November 2005 Immediate Release 23 November 2005 GLOBAL ENERGY DEVELOPMENT PLC NEW CONTRACT APPROVED IN COLOMBIA LUNA LLENA CONTRACT WITHIN VALLE LUNAR ACREAGE Global Energy Development PLC ("Global" or the "Company"), the Latin Americafocused petroleum exploration and production company (LSE-AIM: "GED"), ispleased to announce it has received approval for a new exclusive Exploration andProduction Concession contract with the National Hydrocarbons Agency of theRepublic of Colombia ("ANH") following electing to convert a portion of itsValle Lunar acreage held under a Technical Evaluation Agreement ("TEA"). The new Luna Llena Contract, one of six contracts Global now holds in Colombia,covers 369,000 acres within the approximate 2.1 million acre Valle Lunar TEAlocated in the established Llanos Basin of eastern Colombia. The Valle Lunar TEA, signed in May 2005, grants Global the exclusive option toconvert any of the acreage into a contract or contracts prior to or at the TEA'sconclusion in October 2006. The early conversion of the Luna Llena Contract reflects the Company's wish toaccelerate its work programme on this selected area due to the management'sbelief that the opportunity to develop substantial medium heavy oil reservepotential is significant. Since Global signed the Valle Lunar TEA, the Company has conducted Landsatanalysis of the acreage which yielded a considerable amount of surface data,particularly within the Luna Llena area, that can be utilised in subsurfaceinterpretation. In addition, the Luna Llena acreage contains the identified ElMiedo field which has substantial well tests and subsurface geologic controlthat was acquired by two international oil companies in the 1980's from anextensive drilling effort conducted by them. Oil production tests weresuccessful at this time. Global has already completed engineering and geologicstudies on the El Miedo field. Global will own 100% of the Luna Llena Contract subject only to an initial 8%royalty, with the size of the royalty to be determined by future productionlevels. The Contract duration is 30 years divided into an initial six-yearexploration phase and a 24 year exploitation and production phase. Under theterms of the Luna Llena Contract, Global must within 18 months acquire 165kilometres of 2D seismic, reprocess 500 kilometres of existing seismic, re-enterand test one existing well and drill two exploratory wells which cover the totalgeologic column. Global can then elect, if it so wishes, to proceed to phase twowhich also covers 18 months and requires re-entering another existing well ordrilling another exploratory well. Phases three to five, all optional, are each12 months and require the drilling of an exploratory well in each phase. The Company anticipates the potential deposits within the Luna Llena Contract tobe at shallow depths requiring relatively modest costs and enabling more rapiddrilling. In addition, shallower wells should help surmount any rig availabilityissues to a certain extent as smaller rigs are more readily available. Global will continue to hold the remaining Valle Lunar TEA acreage and conductfurther geologic analysis and geophysical tests over the next several months,fulfilling all the associated work obligations, with a view to potentiallycontracting more of the acreage. The costs incurred under the required work programmes for both the new LunaLlena Contract and Valle Lunar TEA will be met by cashflow from existing andnear-term production from the Company's five productive contracts in Colombia.Commenting on the new Luna Llena Contract, Stephen Voss, Global's ManagingDirector, said:"We are intent on rapidly accelerating our exploitation activity in the portionof our Valle Lunar acreage known as Luna Llena due to the tremendous potentialwe consider it presents.Two international oil companies drilled a number of shallow wells in the 1980swithin Luna Llena to a depth of approximately 3,000 feet which delineated whatis now known to be the El Miedo field. Oil production tests were successful butthe opportunity was deemed non-commercial at the time due to low oil prices.We are now finalising our plans for new drilling in the El Miedo field in thesecond half of 2006. In addition, we believe the Luna Llena and Valle Lunaracreage outside of El Miedo holds other prospective opportunities and we willconduct further analysis and tests over the next several months with a view tocontracting further acreage." For further information: Global Energy Development PLCCatherine Miles, director of Investor Relations +44 (0) 20 7763 7177www.globalenergyplc.com +44 (0) 7909918034 Notes to Editors: Global currently holds approximately 5.1 million acres through seven contractsin Colombia and Peru, an exclusive Technical Evaluation Agreement ("TEA") inColombia and a concluded exclusive TEA in Panama which is in the process ofbeing converted into an exclusive contract. As at 31 December 2004, Global hadindependently reported proved and probable reserves totalling 16.5 million BOE. This information is provided by RNS The company news service from the London Stock Exchange