Unconventional Shale

VMM-37 and VMM-4 are located in the fairway of the most important industry development in Colombia with a growing recognition of what appears to be significant hydrocarbon potential in the unconventional resource play in this area of the Magdalena basin. The La Luna formation, which is a primary target in the Middle Magdalena is considered one of the most productive source rocks in the world. It is also the primary source rock in Venezuela's Maracaibo basin, which is estimated to contain over 250 billion barrels of recoverable oil.

Both VMM-37 and VMM-4 expose Sintana to a potentially large, unconventional shale oil fairway in the thick Cretaceous La Luna and Rosablanca formations which are analogous to the Eagle Ford formation found in Texas. Resource estimates for the Eagle Ford by World Oil Online in June 2011 placed the total gas in place around 84 TCF, and estimates of recoverable oil ranging from 3 billion to 4.8 billion barrels.

Preliminary regional resource estimates for the VMM basin are considerable, ranging from several billion to almost 40 billion barrels of recoverable oil (source: Colombian Agencia Nacional de Hidrocarburos & Universidad Nacional de Colombia, February, 2012). There are other zones within the unconventional section of the basin that, with additional exploration, could lead to significant increases to this resource estimate.

  Magdalena Basin, Colombia Argentina Texas
Parameter VMM Tablazo VMM La Luna Neuquén Basin Eagle Ford
Well Depth (ft) 10,000-14,000 9,000-12,000 10000 10,000-13,000
Gross Pay (ft) 300-900 1,000-2,000 100-600 100-300
Net Pay (ft) 150-450 950-1,900 50-300 100-300
Temp. Reservoir (F) 184 175 - 335
Ro Maturity 1.1 0.7-1.0 1.0-1.2 1.1-1.6
TOC (%) 5.5-7 5-10 4-8 2-6
Effective Porosity (%) 8 15 7-12 6-14
Perm. (nD) 300 770 50-200 1100
STOOIP BBL/acre 40K-80K 750K-1,500K - 75K-150K
Pressure (psi/ft) 0.65 0.55-0.80 0.65-1.0 0.55-0.73
Quartz Content (%) 5 5-15 0-50 5-26
Clay Content (%) 30 17 15-40 15-30
API 43 API+ 26 API 40-45 API 40-60 API
Source: Industry published/Wood MacKenzie Database