CALGARY, May 20, 2014 /CNW/ - Petroamerica Oil Corp. (TSX-V:PTA) ("Petroamerica" or the "Company"), a Canadian oil and gas company operating in Colombia is pleased to announce 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.
Petroamerica Oil Corp. is a Canadian oil and gas exploration and production company with activities in Colombia. Petroamerica currently produces more than 6,500 boe per day and has interests in five blocks, all located in Colombia's Llanos Basin. On April 28, 2014 the Company announced that it signed an agreement with Suroco to acquire all of Suroco's issued shares in exchange for shares of the Company. This transaction is expected to close on or around June 30, 2014 and is subject to Suroco shareholder approval. Petroamerica's shares are listed on the TSX Venture Exchange under the symbol "PTA". A summary of the Company property holdings, including maps of the above noted acquisition, has been included in the current presentation located at www.PetroamericaOilCorp.com
This news release includes forward-looking statements related to the expected occurrences in relation to the properties and drilling activities identified, the anticipated timing of well results, the capital budget, the expected use of funds in the current fiscal year, possible new exploratory drilling in the current year, timing of the closing of the Suroco acquisition and obtaining ANH approval for the interest to be acquired by the Company from PSE. A multitude of factors can cause actual events to differ significantly from any anticipated development and although Petroamerica believes that the expectations represented by such forward-looking statements are reasonable; there can be no assurance that such expectations will be realized. These forward looking statements are based upon assumptions that Petroamerica has made concerning the oil and gas industry in Colombia, the reliability of available data regarding the properties, and the continuing market for oil and gas. Risk factors may include the uncertainty of conducting operations under a foreign regime, the availability of labour and equipment, the fluctuating price of oil and gas, Petroamerica's dependence upon other participants in the property areas and the failure to receive the necessary approvals for the Suroco acquisition and the interest being applied from PSE. Neither Petroamerica nor any of its subsidiaries nor any of its officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors, nor do any of the foregoing accept any responsibility for the future accuracy of the opinions expressed in this document or the actual occurrence of the forecasted developments.
Although the Company believes that the expectations represented by the forward-looking statements contained herein are reasonable, undue reliance should not be placed on the forward-looking statements because there can be no assurance that such expectations will be realized. The forward-looking statements contained in this document are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Certain information contained herein is considered "analogous information" as defined in National Instrument 51-101 - Standards of Disclosure of Oil and Gas Activities ("NI 51-101"). Such analogous information has not been prepared in accordance with NI 51-101 and the Canadian Oil and Gas Evaluation Handbook. In particular, this press release notes that an analogous well in the area encountered well developed Gacheta reservoir sands with good oil shows and a log response suggesting oil pay and makes certain assumptions about the Llanos-19 Block as a result of such analogous information and potential recovery rates as a result thereof. Such information is based on public data and information recently obtained from the public disclosure of other issuers who are active in the area and the Company has no way of verifying the accuracy of such information and cannot determine whether the source of the information is independent. Such information has been presented to help demonstrate that hydrocarbons may be present in commercially recoverable quantities in the Company's area of interest. There is no certainty that such results will be achieved by the Company and such information should not be construed as an estimate of future reserves or resources or future production levels.
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 release.
Use of 'boe'
Throughout this press release, the calculation of barrels of oil equivalent ("boe") is at a conversion rate of 6,000 cubic feet ("cf") of natural gas for one barrel of oil and is based on an energy equivalence conversion method. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6,000 cf: 1 barrel is based on an energy equivalence conversion method primarily applicable at the burner tip and does not represent a value equivalence at the wellhead
SOURCE: Petroamerica Oil Corp.
For further information: Nelson Navarrete, President and CEO; Colin Wagner, CFO; Ralph Gillcrist, COO, Executive Vice President; Tel Bogota, Colombia: +57-1-744-0644, Tel Calgary, Canada: +1-403-237-8300, Email: [email protected], Web Page: www.PetroamericaOilCorp.com