Range Resources (ASX: RRS) associate Citation Resources (ASX: CTR) continues to produce good quality oil from its Atzam-4 well in Guatemala with no water produced and ongoing strong natural reservoir pressure.
Importantly, an updated Reserve report has estimated initial Proved Reserves of 362,515 barrels of oil for just the 6 foot producing section alone.
This increases to more than 500,000 barrels upon production of the additional 7 foot C17 carbonate that has yet to be perforated.
Previous estimates from February 2013 had stated Proved and Probable Reserves of 2.3 million barrels for Atzam-4 based on drilling and logging data.
The 20 million barrel Best Estimate Contingent Resource for the Atzam oil field is also being reviewed.
Range has a direct and indirect 32% interest in Atzam including a 19% stake in Citation.
In addition, independent expert Ralph Davis has recommended that the well be produced at an optimal rate of 466 barrels per day to achieve a maximum flow rate whilst maintaining the reservoir's structure and integrity.
Citation is also on track to spud the Atzam-5 development well in late September while construction of new Atzam tank facilities, which will allow operator Latin American Resources to bring the well off the highly restricted choke, has started.
The continued performance of the Atzam-4 well highlights the value of Range Resources' investment in Citation and the Atazam project.
Atzam is likely to soon contribute cash flow once the new tank facilities are completed.
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