CDS Oil & Gas Group has completed the interpretation and analysis of its geological and geophysical studies, soil gas geochemistry survey and seismic survey in Paraguay. The Company is pleased that the results of the data interpretation have confirmed the potential of certain areas within the Company’s Gabino Mendoza and Boquerón blocks. The prospective unrisked summed hydrocarbon resource estimates for CDS’s prospects include 243 MMBO and 161 BCF nonassociated gas. The analysis has identified several drill prospects and the Company is currently in discussions with potential partners to fund the next stage of its exploration programme.

As announced in the interim statement, the physical exploration programme was completed in September 2008. The soil geochemistry survey was analyzed by Houston-based Exploration Technologies, Inc. The seismic data was processed by two Houston-based oil and gas service companies, Tricon Geophysics, Inc. and Texseis Inc. and interpretation was then undertaken by the Company’s in-house geosciences team in Houston.

In the Gabino Mendoza block, the moderate level of positive soil geochemistry anomalies indicates the presence of a mixed oil and gas source. The Gabino Mendoza prospect consists of an unconventional gas resource which extends over an area of a few hundred square kilometres, having a sedimentary column in excess of 1,200 metres, which would result in prospective resources on an unrisked basis of 140 BCF.

In the Boquerón block where three prospects have been identified - Picuiba Nose, East Emilia and Emilia - the Carboniferous target sands were deposited in the same proximal deep submarine fan facies as the giant San Alberto/San Antonio Field and others in southern Bolivia. From the soil geochemistry survey, it appears that the Picuiba Nose prospect has good hydrocarbon source potential from a mixed oil and gas source. The Picuiba Nose prospect is a 1,100 hectare structural dome located on the crest of a northwest-plunging anticlinal nose. The prospect’s prospective resources have an unrisked estimated ultimate recovery (“EUR”) of 175 MMBO.

The Emilia East prospect features a low-relief structure, with top-seals in the Cretaceous and the Permian above the Carboniferous. This prospect has unrisked prospective resources of 21 BCF non-associated gas and 38 MMBO, derived from volumetric EUR calculations from prospect maps.

In the Emilia prospect, the Carboniferous target sands were deposited in a submarine fan. The targets are the same age and facies as the 22 TCF San Alberto Gas Field in Bolivia. This prospect has unrisked prospective resources of 30 MMBO, based on volumetric EUR calculations from prospect maps.

Patrice Roman, CEO of CDS stated: “The comprehensive programme, implemented by the Company for an amount of more than USD30 million, resulted in a total potential of finding up to 250 MMBOE. It represents a strong encouragement to persevere in our exploration efforts and work towards the start of a drilling programme on the Boqueron block. Discussions with prospective new strategic shareholders are taking place with a view to covering the cost of the next stage of the exploration programme.”

Tags: CDS Oil & Gas Holdings