CALGARY, March 14, 2012 /CNW/ - Shona Energy Company, Inc. (TSXV: SHO) ("Shona" or the "Company"), today announced that it is delivering a total of 14.0 million cubic feet per day (mmcfpd) of natural gas into the Colombian gas market under two contracts. At this delivery rate, Shona is generating approximately US$2 million per month of gross revenue, with the majority of the gas sales coming from Shona's Nelson field.
"The initial commercialization of this important gas asset is essential to Shona's growth strategy going forward," said James L. Payne, CEO of Shona Energy. "With our existing gas reserve base, we have the capability to produce an additional 30 mmcfpd of natural gas. Our challenge now is to finalize these sales either through exercise of existing options, or through new opportunities in the Colombian gas market. "
Under the terms of Geoproduction's larger contract, Shona will provide a firm volume of 11.0 mmcfpd for 2012 and 2013, and a firm volume of 12.5 mmcfpd from 2014 to 2021. Under the terms of the smaller contract, Shona will sell a firm 3 mmcfpd and an interruptible 2 mmcfpd over a seven year term. Pending mutual agreement on pricing and terms, both purchasers have options to acquire additional gas volumes.
The Nelson gas discovery on Shona's Esperanza Block is located in Colombia's Lower Magdalena Basin. The block is 100% owned and operated by Geoproduction, a wholly-owned subsidiary of Shona. The Nelson field has gross reserves of 164 billion cubic feet (bcf) according to the NI 51-101 compliant report effective December 31, 2010 and entitled "Forecast of Production and Revenue in and related to Arianna, Canaflecha, Katana and Nelson Fields located in Esperanza Block, Colombia", which was prepared by Collarini Associates.
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". 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, the payment of the dividend. 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. 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. The reader is cautioned not to place undue reliance on this forward-looking information.
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.
For further information:
please contact either of the following individuals:
Michael Wilkes, CFO
Shona Energy Company, Inc.
Shetal Mentlewski, VP Admin & Legal
Shona Energy Company, Inc.