Petroamerica announces strategic farm-in to the Llanos-19 block in Colombia
Petroamerica Oil Corp. (TSX-V:PTA) (“Petroamerica” or the “Company”), a Canadian oil and gas company operating in Colombia announced that it has entered into a definitive agreement, subject to the approval of the National Hydrocarbon Agency of Colombia (the “ANH”), with Pacific Stratus Energy Colombia Corp. (“PSE”), a wholly owned subsidiary of Pacific Rubiales Energy Corp. (TSX:PRE), to acquire a 50% working interest (“WI”) in the Llanos-19 Block (“LLA-19”), excluding the Tormento Field where PSE will retain its 100% WI.
This farm-in constitutes a key strategic acquisition for Petroamerica, targeting light oil in highly prospective low-side fault closures in the Company’s core producing area. The LLA-19 block is strategically situated with respect to Petroamerica’s existing Llanos Basin blocks, bordering the Los Ocarros Block (50% WI) which contains the Las Maracas Field, the El Eden Block (40% WI) containing the La Casona and Rumi oil discoveries, and the El Porton Block (50% WI in the exploration area and 25% WI in the Curiara oil discovery).
Under the terms of the definitive agreement, Petroamerica has agreed to pay 100% of the capital and operational expenditures of the next exploration well, up to a maximum amount of US $17 million, to earn its 50% working interest in the LLA-19 block. An application will be made to the ANH for their approval to transfer the 50% Working Interest from PSE to Petroamerica.
This strategic farm-in expands the Company’s presence in a highly prospective part of the Llanos Basin and provides exposure to a new play type that is gaining momentum in the Llanos Basin of Colombia, targeting low-side fault closures. Ready-to-drill prospects have already been de-risked by 3D seismic and an exploration well, Tierra Blanca Sur-1, drilled by Elf in 1985 on the edge of one of the prospects encountered well developed Gacheta reservoir sands with good oil shows and a log response suggesting oil pay. Exploration drilling could occur as early as the fourth quarter of 2014. This acquisition, together with the recently announced proposed acquisition of Suroco Energy Inc. (“Suroco”) and its Putumayo Basin assets, significantly strengthens and diversifies the Company’s asset base.