SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report July 3, 2002
(Date of earliest event reported) July 1, 2002
SEVEN SEAS PETROLEUM INC.
(Exact Name of registrant as Specified in its Charter)
Cayman Islands 0-22483 73-468669
(State or Other Jurisdiction of (Commission File Number) I.R.S. Employer
Incorporation or Organization) Identification Number)
5555 SAN FELIPE, SUITE 1700, HOUSTON, TEXAS 77056
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (713) 622-8218
Item 5. Other Events
The Company announced on July 1st that we have suspended further
development drilling in the Guaduas Oil Field pending a reassessment of recently
drilled wells, current production data, and the results of planned production
enhancement efforts on existing wells. Possible modifications to the development
drilling program include the employment of horizontal drilling techniques and
the selection of different well locations.
At the end of May, the Company commenced gas injection operations and
planned to proceed with reconfiguration of several electric submersible pumps in
an attempt to optimize oil production. The Company is also now contemplating
hydraulic fracture treatments on several of the existing wells. The impact of
these operations may not be known for several months.
The Company is presently injecting approximately 40 percent of planned
initial gas volumes. Injection levels should increase upon installation of a
high pressure compressor, scheduled for delivery later this month. However, due
to possible gas encroachment in certain parts of the reservoir, the Company now
believes that current production rates, which averaged approximately 6,800
barrels of oil per day (3,100 net to Seven Seas) for the month of June, may not
be materially improved by gas injection.
As a result of the reduction in production rates and the suspension of
development drilling, Seven Seas does not believe that Guaduas Oil Field gross
production will reach the targeted 18,000 to 25,000 barrels of oil per day by
the end of 2002. The Company is not prepared to estimate future production
levels until these reassessment efforts are completed.
El Segundo 5-N Update
Additionally, the Company reported that the El Segundo 5-N, the seventh
Guaduas Oil Field development well, initially tested up to 500 barrels of oil
per day before being shut in for a forty-eight hour pressure build-up test.
Escuela 2 Update
Seven Seas also reported that the Escuela 2 well was drilling at
approximately 18,770 feet over the weekend when the penetration rate abruptly
fell to near zero. Shortly thereafter, the well experienced significant lost
circulation. When circulation was regained, fine to medium grain sandstone
cuttings were brought to the surface. Although these characteristics are often
indicative of a reservoir formation, it is premature to draw conclusions. The
Company does not know whether the well has crossed the Cambao fault that
separates the overthrust and subthrust formations.
To ensure the integrity of the well bore, the Company is currently in the
process of preparing to run 7 inch casing to total depth and plans to drill
ahead when the casing is in place. The Company does not expect to resume
drilling for several days.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit
No. Description
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10 July 1, 2002 press release
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SEVEN SEAS PETROLEUM INC.
By: RONALD A. LEFAIVE
Name: Ronald A. Lefaive
Title: Vice President of Finance and Chief
Financial Officer
Date: July 3, 2002
INDEX TO EXHIBITS
Exhibit
No. Description Method of Filing
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10 July 1, 2002 Press release Filed herewith electronically