CANACOL Energy Ltd, a Canada based oil production and exploration company, will be spending US$11M on two wells to explore in the Takutu Basin, Region Nine (Upper Takutu/Upper Essequibo), as it intensifies operations this year. A release said the sum will be spent as part of its capital programme for 2011 and the first well to be drilled is the Apoteri K-2, at Karanambo, where the planned spud (initial penetration of the ground) was done jus over a week ago but continued drilling was hampered by the absence of some additionally required pieces of equipment.
But the things have been requisitioned and should be arriving within a week, to permit a resumption of drilling following their installation.
The K-2 will be sunk to a measured depth of approximately 11,000 feet and targets the same productive reservoirs that tested over 400 barrels of light oil per day from the Karanambo Number One well, drilled in 1982 and located 600 metres away.
Another company, Home Oil, had, in 1982, discovered high quality crude oil in the fractured Lower Jurassic Apoteri volcanic and Manari sedimentary reservoirs in the Karanambo Number one and this, it was felt, was proof that the rift basin had an active petroleum system and that commercial oil could exist in the basin.
Canacol bought 55 per cent interest in the Takutu Block in May 2008 and then another 35 per cent in May 2009, now owning 90 per cent in the contract with Groundstar Resources Limited, the operator of the Petroleum Prospecting Licence (PPL), holding the remaining 10 per cent.
Under the terms of the agreement between Canacol and Groundstar, the former will execute the works after the drilling of the K-2 and, therefore, will operate the second well.
Sagres Energy Inc., also a Canada based international oil and gas explorer, is eligible to earn a 25 per cent working interest in the PPL from Canacol, by paying 30 per cent of the cost to drill K-2.
The partners plan to sink a second exploration well on the Takutu Block by May, 2011 and are formulating plans to drill either the Rewa or Pirara river prospects, depending on the results from K-2. 
Gaffney Cline and Associates (GCA), an international advisory firm which provides technical and managerial services and independent advice to all sectors of the oil and gas industry, has attributed recoverable prospective resources of 171 million barrels (111 million barrels net) and 133 million barrels (86 million barrels net) to each of the two wells in its December 2009 report to Canacol.
It was explained that prospective resources are those quantities of petroleum estimated, as of a given date, to be, potentially, recoverable from undiscovered accumulations by application of future development projects.
Prospective resources have both an associated chance of discovery and a chance of development.
Canacol also has oil production and exploration operations in Colombia and Brazil.