Piedra Sola and Salto concessions in Uruguay cover 3.5 million acres (held via a 49% interest in Schuepbach Energy International LLC). With increasing international attention turning to Uruguay after first hydrocarbons discovered in 2017 and successful offshore licensing, the onshore assets in the Piedra Sola and Salto concessions represent an excellent first-mover opportunity for Petrel. Schuepbach International Holdings LLC are currently funding and managing this project. Netherland, Sewell and Associates, Inc. (“NSAI”), as at 14 May 2015, have independently certified an unrisked gross Prospective Resource in the Salto and Piedra Sola concessions of up to 910 MMBBL oil and 3,105 BCF gas (up to 446 MMBBL oil and 1,521 BCF gas to Petrel’s net 49% interest).
In October 2012 Petrel acquired an interest in a large petroleum project in Uruguay. The project comprises two concessions, Piedra Sola and Salto, covering 14,000 sq km (3.5 million acres) which are held under separate production sharing contracts.
Petrel's initial entry was acquired with a US$2.5 million investment for 25% of Schuepbach Energy International LLC (SEI), a private US company, holding the Piedra Sola and Salto concessions and an 85% interest in two prospective gas licences in southern Spain. Petrel exercised an option to increase its SEI shareholding to 51% for US$5.5 million in December 2013.
In December 2017 Petrel’s partner in SEI failed to fund its share of a cash call. Petrel funded its US$2.04 million 51.0% share and also exercised a US$1 million option to increase its SEI interest from 51% to 62.7%. In April 2018 Petrel reduced its interest in SEI to 49% in return for a 97.5% interest in the Tesorillo Project in Cadiz Spain.
The Tesorillo Project is currently the subject of a transaction that, subject to results, will see Petrel’s interest reduced from 97.5% to 50.1% in return for €2m proceeds. These proceeds will cover Petrel’s share of a €3.8m agreed work programme that includes a magnetotelluric programme and if successful, a well to target the Almarchal-1 discovery first drilled in 1956.
The Piedra Sola and Salto concessions onshore Uruguay represent an excellent first-mover opportunity for a company of Petrel's size, in an asset with the resource potential normally associated with major oil companies. The project is prospective for both unconventional oil within the shales and conventionally reservoired oil in the underlying and overlying sandstones.
The Norte Basin in Uruguay forms part of the same oil-producing Devonian basin system which extends into neighbouring Parana Basin in Brazil. It is also productive in Bolivia and Argentina but largely unexplored in Uruguay.
Uruguay is a stable democracy with an excellent working environment, including ready access to oilfield services and equipment from nearby Argentina and Brazil. Uruguay currently imports 40,000 bopd for domestic consumption into the La Teja refinery in Montevideo.
The initial attractions of the Uruguay venture were:
The initial three-year work program for both concessions consisted of a combination of a magnetotelluric (MT) electromagnetic survey, drilling two coreholes and seismic data acquisition.
The magnetotelluric (MT) electromagnetic survey, completed in early 2013, was acquired across the Piedra Sola and Salto concessions with results confirming the existence of a northwest-trending rift basin with Devonian and potential Permian sediments. In addition to basin delineation, the MT survey assisted in identification of corehole locations designed to characterise basic reservoir parameters, resource extent and potential resource size.