Apco Oil and Gas International Inc. (NASDAQ:APAGF) today announced that it has successfully completed its Llanos basin exploration drilling program for 2014. Extended production tests and development activities are underway.

In Llanos 32 where Apco participates with a 20 percent interest, three exploration wells were drilled year-to-date. All three wells, the Kananaskis-1, Carmentea-1 and the Calona-1, discovered proved reserves. The Kananaskis-1 well was put on production from the Mirador formation at an average rate of approximately 5,000 barrels of oil per day during June. The Carmentea-1 tested at 4,300 barrels of oil per day and was put on production at a restricted rate in July. The Calona-1 well will be put on production later in the year when water disposal facilities are installed.

Following the successful exploration drilling, Apco and its partners began development and appraisal drilling. The Kananaskis-2 well was drilled to appraise the Une and Gacheta formations where natural gas and natural gas liquids were produced in the Kananaskis-1 test. Kananaskis-2 was drilled and cased, with testing planned for third quarter. Since the end of the second quarter, Apco drilled a water disposal well for Carmentea and the Kananaskis-3 Mirador appraisal well, and spud the Kananaskis-4 disposal well.

Further production history and possibly more appraisal wells will be required to determine stabilized flow rates and the extent of all the reservoirs discovered by these wells, including evaluation and potential development of natural gas and natural gas liquids reserves lying below the oil reservoirs in the Une and Gacheta formations. In addition, Apco expects that the total gross production from Block 32 will be restricted to between 6,000 and 7,000 barrels of oil per day for the remainder of 2014 in order to maximize long-term reservoir performance and until sufficient production and water-handling facilities to support total fluid volumes produced from the block are operational.

In the Llanos 40 block where Apco has a 50 percent working interest, four exploration wells were drilled to fulfill the initial exploration phase commitments. The first two wells, the Celtis-1 and Ardisia-1, were drilled from the same pad and tested during the second quarter. The Celtis-1 well discovered proved reserves from the Une formation. The well is temporarily shut-in until later in the year when water disposal facilities are scheduled to be operational. The well is expected to be placed on production at approximately 500 barrels of oil per day. The Ardisia-1 well did not recover commercial hydrocarbon volumes and is being converted to a water disposal well to handle water volumes produced from the Celtis-1 well.

The third well drilled in the Llanos 40 block, the Begonia-1, discovered oil from the Carbonera 7 formation. The fourth exploration well, the Berbena-1, was determined to be unproductive and is being converted to a water disposal well to handle anticipated future volumes of water produced from the Begonia-1 well. Apco anticipates commencing long-term production testing of the Begonia-1 well in the third quarter. The well is expected to produce approximately 2,000 barrels of oil per day.

Following its recent acquisition of the previous operator of Block 32, Parex Resources Inc. (TSX:PXT) is now the operator of both the Llanos 32 and Llanos 40 blocks.

“We are very pleased to see success from our exploration strategy in Colombia,” said Michael Kyle, Apco’s president and chief operating officer.

“We expect these discoveries to deliver strong results and provide meaningful increases to our production in the second half of 2014 and beyond. With the intensive exploration program wrapping up, our efforts have turned to development and evaluating the resources discovered to date,” Kyle added.

About Apco Oil and Gas International Inc. (NASDAQ: APAGF)

Apco Oil and Gas International Inc. is an international oil and gas exploration and production company with interests in nine oil and gas concessions and two exploration permits in Argentina, and three exploration and production contracts in Colombia. More information is available at www.apcooilandgas.com. Go to http://www.b2i.us/irpass.asp?BzID=1671&to=ea&s=0 to join our e-mail list.

Our reports, filings, and other public announcements may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. You typically can identify forward-looking statements by various forms of words such as "anticipates," "believes," "seeks," "could," "may," "should," "continues," "estimates," "expects," "forecasts," "intends," "might," "goals," "objectives," "targets," "planned," "potential," "projects," "scheduled," "will" or other similar expressions. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management and include, among others, statements regarding:
  • Amounts and nature of future capital expenditures;
  • Volumes of future oil, natural gas, and LPG production;
  • Expansion and growth of our business and operations;
  • Financial condition and liquidity;
  • Business strategy;
  • Estimates of proved gas and oil reserves;
  • Reserve potential;
  • Development drilling potential;
  • Cash flow from operations or results of operations;
  • Seasonality of natural gas demand; and
  • Oil and natural gas prices and demand.

Forward-looking statements are based on numerous assumptions, uncertainties and risks that could cause future events or results to be materially different from those stated or implied in this announcement. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following:
  • Availability of supplies (including the uncertainties inherent in assessing, estimating, acquiring and developing future oil and natural gas reserves), market demand, volatility of prices, and the availability and cost of capital;
  • Inflation, interest rates, fluctuation in foreign currency exchange rates, and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on our customers and suppliers);
  • The strength and financial resources of our competitors;
  • Development of alternative energy sources;
  • The impact of operational and development hazards;
  • Costs of, changes in, or the results of laws, government regulations (including climate change regulation and/or potential additional regulation of drilling and completion of wells), environmental liabilities and litigation;
  • Political conditions in Argentina, Colombia and other parts of the world;
  • The failure to renew participation in hydrocarbon concessions granted by the Argentine government on reasonable terms;
  • Risks related to strategy and financing, including restrictions stemming from our loan agreement and the availability and cost of credit;
  • Risks associated with future weather conditions, volcanic activity and earthquakes;
  • Acts of terrorism; and
  • Additional risks described in our filings with the Securities and Exchange Commission ("SEC").

Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. We disclaim any obligations to and do not intend to update the above list or to announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments.

In addition to causing our actual results to differ, the factors listed above may cause our intentions to change from those statements of intention set forth in this announcement. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise.

Investors are urged to closely consider the disclosures and risk factors in our most recent annual report on Form 10-K filed with the SEC and our quarterly reports on Form 10-Q available from our offices or from our website at www.apcooilandgas.com .

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