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In June 2007, the Company entered into an agreement with Gold Oil, Plc ("Gold") and Empesa Petrolera de Servicios y Asesorias, S.A. ("EMPESA), whereby they farmed-in to the approximately 165 square mile Rosa Blanca concession in Colombia awarded by the Agencia Nacional de Hidrocarburos ("ANH") to Gold in June, 2007.
- Under the Agreement, Osage is considered the operator of the concession and will pay all costs associated with drilling and testing of the first well on the Rosa Blanca project. Revenues generated from the first well will be allocated 50% to Osage, 40% to Gold and 10% to EMPESA.
- The block, known as Rosa Blanca, is surrounded by the nearby oil producing fields of Cristalina, Santa Lucia, Tisquirama, Totumal, Buturama and South Bolivar Block.
- The most attractive oil play within the Rosa Blanca Block has a geological structural trap of a faulted anticline with 600 feet of vertical closure at approximately 3000 feet depth with an areal extent of around 3000 acres, which the Company has interpreted to have the same geological signature of the nearby Buturama oil field. The Buturama field adjoins the Rosa Blanca property to the south, and successfully produced at rates as high as 7600 barrels a day.
- The Rosa Blanca field is adjacent to existing infrastructure for oil and gas delivery. Within 10 miles of the site is a pipeline terminal which the Company could utilize.
- Assuming that the production from Rosa Blanca warrants it, a short pipeline could be built to connect the field to the terminal.
- The field is also located near both Halliburton and Schlumberger's stockyard in the event that any additional equipment is needed for the wellsite.
- The Company estimates 20 wells could be ultimately drilled to fully develop the structure.
- Osage plans to initiate drilling on the Rosa Blanca in Q4, 2008.
