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Abstract: Reserves Growth by Field Rejuvenation - Dacion Field Venezuela

In June 1997, during the week of bidding for 3rd Round Operating Contracts in Venezuela, LASMO bid $453 million for the Dacion Contract.The bid was the largest of the week and established LASMO as one of the major operators in Venezuela and positioned us for further growth. It has also established within our company key skills that will be applicable as we compete for other redevelopment opportunities around the world.

The Dacion field was discovered in the 1940s and when LASMO took over operations 310 million barrels had been produced by primary depletion. The field had not been subject to either 2 or 3D seismic.

Our confidence to bid for Dacion was founded on (a) the field area contained 2.2 billion barrels of STOOP and reservoir quality was excellent; (b) establishment of a life of field alliance with Schlumberger creating immediate access to their Venezuelan operating experience and allowing for rapid deployment of emerging technologies; (c) clear evidence that the field area could be developed in a low cost, flexible fashion in order to minimise risk and maximise value; (d) recognition of significant exploration upside in the block area; and (e) recognition of key technologies necessary to create significant value.

Since takeover of operations, LASMO has booked commercial reserves of 350 million barrels and increased production to 23,000 bopd. We have completed a block wide 3D seismic programme and have initiated a 1999 exploration programme comprising 6 wells. We anticipate booking further reserves this year and believe that the initial field has the potential to produce at 120,000 bopd. We have established a significant operating presence in the Dacion area.The Officina region holds some 50 billion barrels of oil-in-place with 9 billion barrels yet to be produced.We are ideally positioned to further build our business in this area.

AAPG Search and Discovery Article #[email protected] International Conference and Exhibition, Birmingham, England