NAUT.L Regulatory News (NAUT)

6 Apr 2006 07:00

Global Energy Development PLC06 April 2006 Immediate Release 6 April 2006 GLOBAL ENERGY DEVELOPMENT PLC NEW CONTRACT SIGNED IN COLOMBIA LOS SAUCES CONTRACT WITHIN LLANOS BASIN Global Energy Development PLC ("Global" or the "Company"), the Latin Americafocused petroleum exploration and production company (LSE-AIM: "GED"), ispleased to announce that it has signed a new exclusive Exploration andProduction Concession contract for the Los Sauces area (the "Los SaucesContract") with the National Hydrocarbons Agency of the Republic of Colombia.The Los Sauces Contract brings to eight the number of contracts Global now holdsin Colombia in addition to a Technical Evaluation Agreement, all of which are100% owned by Global. The Los Sauces Contract covers approximately 61,600 acres in the Central Llanosregion of Colombia where Global already has three contracts, namely theAlcaravan Association contract and the Rio Verde and Los Hatos Exploration andProduction Concession contracts. The Los Sauces Contract is contiguous with thenorthern boundary of the Rio Verde contract where the Company is currentlytesting the Tilodiran 2 exploratory well, with one zone having produced at anatural flow rate of 1,125 bopd plus gas, and is also located nearby andadjacent to the established, producing Morichal and Tocaria fields operated byan international oil company. Global will own 100% of the Los Sauces Contract subject only to an initial 10.5%royalty, with the size of the royalty to be determined by future productionlevels. The Contract, effective from 31 March 2006, has a principal term of 30years divided into an initial 6 year exploration phase and a 24 yearexploitation and production phase. Under the terms of the Contract, Global mustwithin 12 months reprocess approximately 200 kilometres of existing seismic,acquire and process 50 kilometres of 2D seismic and drill one exploratory well.Global can then elect if it so wishes to proceed to phase 2, 12 months induration, and drill one exploratory well. Phases 3 to 6, also all optional and12 months in length, require the drilling of an exploratory well in each phase. The Los Sauces area has been subject to prior drilling activity by aninternational oil company over 10 years ago at which time the La Totuma 1 wellwas drilled with reported oil shows. Based upon the existing formation andseismic data, Global has elected to position and drill an exploratory wellgeologically updip from the existing La Totuma 1 well and expects to do so latein the second half of 2006. Cash flow from Global's productive contracts in Colombia is anticipated to fundthe required work programme with Global currently projecting total capitalexpenditure in 2006 to be approximately $23 million. Commenting on the new Los Sauces Contract, Stephen Voss, Global's ManagingDirector, said: "Los Sauces, together with drilling at Rio Verde, the Bocachico-Torcaz fieldimproved recovery CO2 Project and the Bolivar improved recovery methane gasinjection project, represents one of Global's lower-risk "bridge" projects thatare intended to ramp up near-term production and strongly grow cash flow. Global proposes to accelerate its activity on the Contract area above thatrequired under the terms of the Contract as the management team consider the LosSauces area to offer relatively predictable drilling with high daily productionrates. The fore-mentioned "bridge" projects should enable the more rapid execution ofGlobal's high reserve potential opportunities at Caracoli and Luna Llena inColombia, Block 95 in Peru and Garachine in Panama through providing a muchincreased capital expenditure budget." 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 has been listed on the AIM Market of the London Stock Exchange sinceMarch 2002 (LSE-AIM: "GED"). The Company currently holds in excess of 5.2million acres through nine contracts in Colombia and Peru, an exclusiveTechnical Evaluation Agreement ("TEA") in Colombia and a concluded exclusive TEAin Panama. Global's portfolio comprises production, developmental drilling andworkover opportunities and several high-potential exploration projects. This information is provided by RNS The company news service from the London Stock Exchange