BLACK ROCK OIL: CHARTS, RESEARCH AND DISCUSSION (moderated)

Vavoom2,

You were re-posting my posts on BLR's cash balance on activities to date. You will find that neither Acacia nor Chicala have been drilled and are very much future activities. Glad that BLR have cleared that up for you now.

Jim,

Agreed, most likely that the funding has already been arranged and will be announced in due course. The part on Arce is very interesting:

"Colombia

In Colombia, Black Rock has an involvement with two licenses, the Las Quinchas
Association Contract and more recently the Alhucema E&P Contract. In the Las
Quinchas Contract, Black Rock is actively pursuing its obligations under the
farm-in contract signed with Kappa in April 2005 in which it agreed to fund
certain exploration drilling activities in order to earn a right to obtain,
subject to Ecopetrol's approval, a 50% interest in the Block.


Within the Las Quinchas Association contract, there have been positive results
from the Arce Field project during the financial year. Testing of the Arce 3
appraisal well commenced in August 2005 and was drilled to a total depth of
2,936 feet, encountering the reservoir objective 80 feet higher than had been
expected. The well produced oil at rates of between 25 and 36 barrels per day
using a beam pump with a stroke length of 102 inches and a rate of 2 strokes per
minute. The oil had an API gravity of 13.5 degrees.


The Arce 4 appraisal well drilled in June 2006 has also been a success, with oil
flowing at the rate of 30.5 barrels per day at standard conditions. The well has
been drilled to a total depth of 3,073 feet and intersected a gross 300 foot oil
section. Subsequently the well underwent testing and analysis of the oil
indicated that, while classified as heavy with a gravity of 16-17 degrees API,
it is liquid at room temperature and pressure.


On completion of operations at Arce 4, the drilling rig was used to re-complete
the gravel pack on Arce 2.


Our operator and joint venture partner, Kappa Resources Colombia Limited,
estimates that the mean recoverable reserves of the field have increased
significantly to above 10 million barrels following recent seismic
reinterpretation and mapping. In addition, flow rates are expected to increase
by up to 3-5 times once we have steam stimulated the field. As stated in last
year's annual report, steam injection and production is now a proven technique
used in Colombia to increase oil flow by lowering the oil viscosity and is
successfully being used for production in the adjacent fields."

So the Arce field has received a doubling of prospective reserves as a result of the new seismic, which means that Arce alone is looking like it is worth more than our current market cap regardless of the other multiple projects on the table at present. It will be good to get the funding of Acacia and Chicala behind us as we move to production hopefully mid year. Its good to see progress at BLR at last, it has been a long time coming. If Arce is twice the size previously thought then it could support higher full field development production rates. It could be a very interesting year ahead for BLR.

Regards,
Ed.