July 28, 2011 / 2:33 PM / 6 years ago

Petroamerica Oil shares jump as Colombia project nears commercialisation

July 28 (Reuters) - Canada's Petroamerica Oil Corp said it found negligible water in two oil wells in Llanos Basin in Colombia, taking the project closer to commercial production, driving the company's shares up as much as 14 percent.

Petroamerica said the two wells in Balay block produced 6,561 barrels of oil per day, with negligible water.

The company has a 15 percent interest in the Balay block.

"Placing both wells on ESP (electro-submersible pump) is a significant milestone for both the Balay block and Petroamerica," Chief Executive Nelson Navarrete said.

"These test results demonstrate the true potential of the Balay discovery and bring us a step closer to commercialisation."

The crude oil is currently being trucked by road and the logistics required to transport this quantity of crude oil is under review, the company said in a statement.

Since receiving approval from the Colombian National Hydrocarbon Agency in January to June 30, Petroamerica has received gross revenues of $2.8 million from Balay production, with an average price of $105.91 per barrel.

Petrobras Colombia is the operator of the project with 45 percent interest and the Cepsa Colombia S.A has 30 percent, while Sorgenia E&P Colombia B.V holds a 10 percent interest.

Shares of the Calgary, Alberta-based were trading up 7 percent at 15 Canadian cents on Thursday on the Toronto Venture Exchange.

They touched a high of 16 Canadian cents earlier and were the most heavily traded shares on the exchange, with 2.9 million shares changing hands by 1430 GMT. (Reporting by Aftab Ahmed in Bangalore; Editing by Joyjeet Das)

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