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Projects

THE PIRITY CONCESSION PROJECT (PARAGUAY)

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The Pirity Block concession project could be described as a very unique oil and gas exploration project that is being developed in three (3) Phases. Phase 1 was mainly focussed on perfecting the Concession License (Law 3479 of the Republic of Paraguay), acquiring all the pre-existing Data and processing this Data. It took place during the period 2007 to 2011, when Petro-Victory, LLC started this project by initially executing an environmental impact study, obtaining the corresponding environmental license, perfecting all the Concession documents and carrying out several activities related to the search, acquisition, compilation, assessment and processing (geological & geophysical evaluation and interpretation) of the pre-existing Data [2D seismic data and some well data and reports which were previously acquired by other operators, mainly Exxon and Occidental Petroleum (OXY), which conducted exploration activities in the Pirity Sub-Basin of Paraguay during the 70’s and 80’s, respectively]. As a direct result of this process, approximately 4,000 Km of high quality digitalized 2D seismic data and other digital well data and reports, which were previously acquired by the indicated Companies at the Pirity Basin, were obtained and professionally evaluated.

Then, the Company contracted the professional services of several service Companies, including IHS, Inc., Iron Mountain, Inc. and three filial of the international service company Schlumberger (Data Consulting Services, Inc., WesternGeco and Integrated Exploration Services, Inc.) in order to create digital copies of the Data, reprocess some of the 2D seismic lines, apply inversion technics to several key seismic lines, conduct a very comprehensive geophysical and geological evaluation and interpretation of the Pirity Sub-Basin and the Pirity Block, carry out a Hydrocarbon Migration Analysis of the Olmedo-Pirity Basin and detect (categorize) numerous leads and prospects. These Companies produced several exceptional reports that identified several leads and prospects within the Pirity Block and recommended some additional seismic acquisition work.

On January 31, 2012, Petro-Victory LLC, through its filial Pirity Hidrocarburos SRL, and the Paraguayan company named LCH, S.A. executed an Agreement by which LCH was granted a minority five (5) percent partially carried working interest in the Pirity Concession. The partially carried five (5) percent working interest was only up to the minimum working commitment as defined by the Republic of Paraguay Hydrocarbon Law 779/95.

Phase 2 of the project started on September 11, 2012, when the Company entered into the Pirity Farm-Out, pursuant to which the U.K. company President Energy, agreed to act as the operator and was granted the right to earn up to a fifty nine (59) percent working interest in the Pirity Concession on an incremental basis, to a maximum expenditure of fifty (50) million dollars.

Since the farm-out was completed, Petro-Victory, LLC together with President Energy as Operator have managed an extensive new seismic campaign to acquire more valuable data, further evaluate the basin potential and define high graded drilling prospects. Specifically, they have acquired 791 km2 of 3D and 459.89 km of 2D seismic in the Pirity Block. The seismic was undertaken by a contractor, Global Geophysical Inc. Multiple geological and geophysical studies were also completed. Preparation of drilling sites commenced at the end of 2013, with a view to drilling two-plus-one exploration wells in 2014. The third well would be subject to the results of the first two wells.

The new seismic data have identified two structural play fairways each containing two petroleum systems. The first is the Cretaceous petroleum system, known from old 2D data and an extension of the Palmar Largo trend in Argentina. The second is a newly identified underlying Paleozoic petroleum system that has charged the large producing fields in neighboring southern Bolivia and north western Argentina. Several of the Pirity Rift Basin prospects benefit from the possibility of receiving a double charge from both play systems, thereby reducing source risk. This double play system makes it possible for this Pirity Rift Sub-Basin to develop into a large scale hydrocarbon province.