Shona Energy Company, Inc. through its wholly-owned subsidiary Geoproduction Oil & Gas Company of Colombia, a Bogota based company, reports a significant gas discovery and the successful completion of its Nelson-2 well located within the Esperanza concession in the Lower Magdalena Basin of Colombia. This concession is operated and retained 100% by Geoproduction. The Nelson-2 encountered a 500 feet gas column with 135 feet of net pay as calculated by a third party consultant. Only the upper 48 feet of pay was tested and had production rates of 5800 MCFD with 2638 psi flowing pressure on a 24/64" choke. The calculated absolute open flow rate was 77 MMCFPD. Petrophysical data indicated porosities ranging from 17% to 27% and permeabilities of 600 to 800 md. Based on an extensive 3D survey, the closure is approximately 1600 acres. Reserves, which include proved, probable and possible, have been calculated at 164 BCF by a third party engineering company, Collarini Associates, located in Houston, Texas.
An eleven kilometer 6" gathering pipeline is currently under construction from the Nelson field to the existing natural gas processing facility, Jobo Station. It is expected to be completed the first part of April 2011. The gathering line's capacity is 60 MMCFPD, which will handle future Nelson field development and exploration success in the immediate area. At this time, Geoproduction sells gas at the Jobo Station, which is connected to the national gas transportation network. Discussions are currently underway for gas sales from the Nelson field.