GeoPark Holdings Limited reports the successful drilling and testing of a new discovery oil well on the Guanaco prospect on the Fell Block in Chile. GeoPark operates and has a 100% working interest in the Fell Block.

GeoPark drilled and completed the Guanaco 3 well to a total depth of 2,752 metres. A production test in the Springhill formation, at approximately 2,590 metres in an 8 metre perforated interval, flowed at a rate of approximately 470 barrels per day (bpd) of oil (33° API) with a 2% water cut through a choke of 50 millimetres (mm) and with a well head pressure of 30 pounds per square inch (psi). These are preliminary results and further production history will be required to determine stabilised flow rates and the extent of the reservoir. A beam-pumping unit and production facilities are now being installed and production is targeted to commence within seven days.

The production test in Guanaco 3 represents the third successful well and first exploration discovery drilled by GeoPark in 2010. Preliminary interpretations indicate the Guanaco structure to be approximately 3.5 square kilometres (sq km) in area. The Guanaco field is located in the south central area of the Fell Block and represents a previously undrilled area by GeoPark covering approximately 150 sq km and where vintage 2D interpretations indicate the presence of several oil and gas prospects. GeoPark is currently completing a 90 sq km 3D seismic survey over this area (to complement an existing 3D survey over the well location), as well as, a new 70 sq km 3D seismic survey in another unexplored region to the northwest. Processing and interpretation of these new 3D surveys is expected to be complete by the end of 2Q10. Following these surveys, the Fell Block will be covered by 1,007 sq km of 3D seismic representing approximately 57% of the total block area.

In other operations and as part of its 15-17 well drilling program in 2010 in Chile, GeoPark has completed drilling the Aonikenk Sur 1 well where testing operations will begin in April. Drilling is also now being completed on the Alakaluf 7 well, which will be followed by the Alakaluf 9 well.

On the large Tranquilo and Otway Blocks in southern Chile, GeoPark has initiated 2D seismic surveys covering 545 km and 3D seismic surveys covering 430 sq km. Drilling on the Tranquilo Block is targeted to commence in 4Q10.

Commenting, James F. Park, Chief Executive Officer of GeoPark, said, 'In addition to the discovery of the new Guanaco oil field, this result is also important because it opens up a new area of prospectivity on the Fell Block in Chile. The Fell Block continues to demonstrate its underlying value and potential with its diversified portfolio of production, development and exploration opportunities. It is encouraging that after nearly three years of continuous drilling on the Fell Block our team continues to develop new plays and discover new oil and gas reserves. We believe our success on the Fell Block also demonstrates the overall opportunity and hydrocarbon potential in Chile when new investment directed by good science is applied to new areas.

GeoPark also confirms that the massive earthquake which hit central Chile did not strike the Magallanes region in southern Chile where its personnel, operations and assets are located. We were fortunate to be unaffected by this earthquake, however, we extend our solidarity and support to those who were impacted. GeoPark and its personnel are now contributing to the aid efforts and we will further express our support and confidence in Chile by continuing to increase our investments and operations as Chile rebuilds.'

Tags: Geopark Holdings Ltd.