Marifil Mines (CVE:MFM) says that it has regained ownership of the Mina El Carmen oil and gas property in Chubut Province, Argentina.
The Mina El Carmen project has a potential target of 8.1 billion cubic feet of natural gas and 6.4 million barrels of oil, the junior explorer noted Friday.
Marifil’s geologic report, including the estimate of target size, was prepared by an Argentinian petroleum geologist who is a member of the American Association of Petroleum Geologists, but is not a Qualified Person as defined by NI 51-101.
The company therefore cautioned investors that the estimated target is not a defined resource.
The property was sold to private company Ilakon Ltd in November 2010 for $250,000, an 8% royalty, and an annual minimum advance royalty of $75,000.
Ilakon then sold the property to British Obtala Resources, who then failed to make the $75,000 advance royalty payment due last month.
As a result, Marifil exercised its right to cancel the contract and is now the owner of the property.
The asset comprises four patented oil claims totalling 2,001 hectares located on the north flank of the Golfo San Jorge Basin in Chubut Province, Argentina.
Twelve shallow wells were drilled on the property by private and government oil companies between 1928 and 1944, primarily to test a near-surface gas-bearing formation.
Four of these wells have shut-in gas and two of the deeper wells reported oil and gas shows from deeper reservoirs, Marifil said.
It again warned, however, that several factors limited the value of this early testing, including "lack of technical ability, lack of seismic coverage, the use of now obsolete technology, and placing wells where access was convenient rather than based on geology".
Marifil also said Friday it will begin looking for a new joint-venture partner for the property.
Earlier this week, the Vancouver-based company said it found a potential "heap leachable" gold deposit at the zone 34 area on its San Roque property in Argentina. The zone hosts two sub-parallel gold-bearing structures about 125 metres apart, each more than 200 metres in length - named the west and the east system.
Marifil is a Canadian exploration company that focuses on Argentina. Through its joint venture opportunities, it has been able to develop a diverse portfolio of properties, including several with bonanza grade gold, silver, copper and indium values.
The company has a land position of 20 properties, totalling more than 400,000 hectares within nine provinces of Argentina. It recently resumed the operator role at its Las Aguilas property after miner Prophecy Platinum (CVE:NKL) decided not to move forward with their joint venture agreement.
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