LONDON (ShareCast) - (ShareCast News) - One of Riverstone Energy's portfolio companies, Sierra Oil & Gas, said it had discovered "significant quantities" of oil in its primary target formation at the Zama 1 well on Wednesday.
The firm said preliminary analysis indicated the presence of a contiguous oil bearing interval of more than 1,100 feet gross, with net pay of over 650 feet and no identified oil-water contact.

Initial oil in place estimates for the target formation, which the board said could extend into to a neighbouring block, ranged from 1.4 billion to 2.0 billion barrels.

Hydrocarbon samples recovered to surface contained light oil, with API gravity of 28-30.

"Zama 1 is the first exploration well drilled by the private sector in Mexico since the start of the country's energy reform, and the discovery is one of the largest made in recent years in the Gulf of Mexico," Riverstone's board said in its statement.

"The well is located in Block 7, in which Sierra holds 40% working interest, along with operator Talos Energy. [which holds a] 35% working interest and [is] also a Riverstone portfolio company, and Premier Oil, [which holds a] 25% working interest.

"The discovery is on trend with other prospects in Block 7 and in two other blocks awarded to Sierra and its joint venture partners."

Sierra Oil & Gas was described by Riverstone as Mexico's "first" independent oil and gas company.

Over the last two years, in partnership with "world-class" operating partners, Riverstone said Sierra had secured five upstream blocks in Mexico's offshore licensing tenders.

As of 31 March, Riverstone had invested $1m of its $38m commitment in Sierra.

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