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Petrel Energy in first deep onshore shale drilling in Uruguay for 30 years

Petrel Energy in first deep onshore shale drilling in Uruguay for 30 years

Petrel Energy (ASX:PRL) is to embark on a two hole 2000 metres core drilling to test for oil and gas at its 3.5 million acre shale play in what will be the first deep onshore shale drilling in 30 years in Uruguay. 

The drilling is likely to start in August and will target organic rich shales in the Norte Basin that are of similar age as the prolific Bakken shale of North America. The Basin also is the same oil-producing basin system which extends into neighboring Brazil and is also productive in Bolivia and Argentina, but largely unexplored in Uruguay.

Uruguay currently imports about 40,000 barrels of oil per day into its La Teja refinery in Montevideo and the government is actively encouraging foreign investments.

It has already filed for regulatory and landholder approvals and two companies have been contracted for to simultaneously drill both the holes. Drilling will be done by operator and Petrel Energy Partner Schuepbach Energy International (SEI).

They will be drilled to an estimated depths of 700 and 1300 metres over a 4 to 6 week period.

Petrel has the first mover advantage in onshore shale drilling in Uruguay.

The two coreholes represent the first deep onshore petroleum exploration in Uruguay for over 30 years and the first focused on unconventional targets.

The first two coreholes will allow the company to determine the distribution of organic-rich shales and other potential reservoirs and will be followed by seismic acquisition to guide follow-up exploration drilling and resource distribution.

The two concessions cover 14,000 sq km (3.5 million acres). Petrel Energy currently holds a 25% interest in SEI and has an option to increase its shareholding to 51% later in 2013 for US$5.5 million.

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