Greymouth makes "very significant" gas find in Chile

Tuesday 6th April 2010

Greymouth Petroleum's Chilean subsidiary, PetroMagallanes, announced today it has made a "very significant" gas find in the Caupolican Block on Tierra del Fuego, following drilling of the Clarencia 1-A well.

The company fully funded the exploration well in the area, which it holds 50/50 with the Chilean national oil company ENAP, and says it will "lead to an early declaratiion of commercial exploitation under the terms of the contract with the government of Chile".

The development had been delayed by unresolved tax wrangles in New Zealand, after Greymouth committed to a drilling programme in Chile in 2007, only to see tax rules changed to prevent foreign exploration costs being written off against New Zealand oil and gas sector revenues.

PetroMagallanes expects that the discovery should assist continued operations of a nearby methanol production chain, benefitting two other gas field operators and the gas transmission system operator.

The company is now shifting its drilling rig to Rio del Oro, also in the Caupolican block, where further testing of an oil and gas discovery is occurring. Findings from this area and the Clarencia find will allow Petromagallanes to plan further seismic acquisition programmes in the block.

The company has rights to explore in three other blocks in the Straits of Magellan.

Businesswire.co.nz

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