Shona Energy Company, Inc. Provides Operational Update
CALGARY, July 27, 2012 /CNW/ - Shona Energy Company, Inc. (TSXV: SHO) (OTCQX: SHOAF) ("Shona" or the "Company"), today announced that the Operator of Block 102, Pluspetrol E&P S.A. ("Pluspetrol"), has advised that Shona's planned production test of the Boa Oeste 1X well, which was disclosed in the Company's press release dated April 3, 2012, has been delayed. As a result of the delay, and upon further evaluation of the benefits of the production test, the Company has determined that further expenditures on the Boa Oeste 1X well, including the cost of the proposed testing, is not economically warranted. Accordingly, Shona has elected to be a Non-Consenting Party under the terms of its Joint Operating Agreement and relinquish its rights to the Boa Oeste 1X well, as well as any future Development Area for the well. Shona will retain its 36.5 per cent working interest in the rest of Block 102.
"Shona has determined that the proposed three month test on the Boa Oeste 1X well would not be sufficient to confirm commerciality," said James L. Payne, CEO of Shona. "Based upon further analysis of the Boa area, the Consortium has made a strategic decision to turn our focus to the Macusari and Capahuari trends, which have higher reserve potential."
The Consortium has elected to proceed to the Fourth Exploration Period of the License Contract for the Block 102. The other Parties in the well, including the Operator, Pluspetrol, and Andean Oil and Gas S.A.C., have indicated they will participate in the testing of Boa Oeste 1X well.
Esperanza Block - Completion of Seismic Program
Shona's wholly owned subsidiary, Geoproduction Oil and Gas Company LLC ("Geoproduction"), has completed the acquisition and processing of 103 square kilometers of 3-D seismic and 14 kilometers of 2-D seismic on the Esperanza Block, located in Colombia's Lower Magdalena Basin. Interpretation of the data is in its final phases.
"We are very encouraged by the seismic data, which indicate a number of prospects that have the same seismic attributes as those observed in the Nelson Field discovery," said Mr. Payne. "We have initiated an aggressive marketing program to monetize our existing gas reserves and numerous low-risk prospects on the Block."
Shona controls 100% working interest in the Esperanza Block through its ownership of Geoproduction.
Shona is an international oil and natural gas exploration, development and production company focusing on South America, specifically Colombia and Peru. The Company's assets currently include interests in the Company-operated Esperanza block located in Colombia's Lower Magdalena Basin, the non-operated Serrania, Los Picachos and Macaya Blocks in Colombia's Caguan Basin, and the non-operated Block 102 in Peru's Maranon Basin. The common shares of the Company trade on the TSX Venture Exchange under the stock symbol "SHO" and the OTCQX International under the stock symbol "SHOAF". More information on the Company is available at www.shonaenergy.com.
Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, expectations regarding future oil and gas production from the Company's properties, the production capacity of the Company's properties, the anticipated use of seismic data and exploration and development plans on properties in which the Company holds an interest. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although Shona believes that the expectations reflected in such forward-looking information is reasonable, undue reliance should not be placed on forward-looking information because Shona can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things: the ability of Shona to complete transactions described in this press release, the timely receipt of any required regulatory approvals, the performance of existing wells and success obtained in drilling new wells, anticipated expenses, cash flow and capital expenditures, the application of regulatory and royalty regimes and prevailing commodity prices and economic conditions. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. Shona undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, unless required by law. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
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David Gian, Treasurer & Investor Relations
Shona Energy Company, Inc.
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Shona Energy Company, Inc.