Molecular Energies begins drilling exploration well near Paraguay near prolific Argentine oil field
(WO) – Molecular Energies confirmed that the Tapir x-1 exploration well at the Pirity Concession in the Chaco, Paraguay, has been spudded.
Target depth is approximately 3,800 m with an estimated drilling time of 45 days. The prospect and the adjacent complex of prospects being drilled are covered by good quality 3D seismic data from a survey conducted for Molecular in 2013/14.
The data suggests a clear structural feature being a four-way dip closure with seal and target formations of volcaniclastic sedimentary rocks and lecho sands. The prospect is located approximately 40 km in an easterly direction from the formerly prolific Palmar Largo oil field in Formosa Province, Argentina, where a major producing formation is from volcanic rocks. If successful, the well would unlock a complex of adjacent prospects estimated by the company to hold over 260 MMboe of Pmean unrisked resources.
Molecular estimates the main geological risk is that of migration from the source rock which, in the absence of other data, the company believes is from the same or similar source to that which filled the reservoir in Palmar Largo. While migration paths are capable of being postulated on available data, the overall distance and other migration features mean that, despite the suggested availability of good quality reservoir rocks, the chances of success are assessed at 17%. A success would then prove up the main risk of migration thereby unlocking the complex of prospects as above.
Even with a conservative recovery factor of 5% and an oil price of $70 per barrel, with incentivized fiscal tax rates of 10-14% royalty and a tax on profit limited to 10% the prize, therefore makes the well compelling to drill. Oil is the more likely hydrocarbon if a commercial discovery is made. Paraguay currently imports all its oil over 1000 km upriver from the South Atlantic.
Lead image source: Molecular Energies