TSX Venture Exchange Symbol: SNV
CALGARY, June 12, 2012 /CNW/ - Sonoro Energy Ltd. ("Sonoro" or "the Company") (TSXV: SNV) is pleased to announce that the Company, through a wholly-owned subsidiary, has entered into an agreement to purchase a drilling rig. The drilling rig will be transferred to a joint venture company ("JV Co"), to be established by Sonoro and its partners, Berkeley Petroleum Mesopotamia Limited ("Berkeley") and Geopetrol Iraq Corp. ("Geopetrol" and collectively with Sonoro and Berkeley, the "Partners"), for their planned asphalt operations in Salah ad Din Province, Iraq.
The Company spent considerable time and effort reviewing various rig rental alternatives in the Middle East region during the last year, including conducting rig inspections and detailed negotiations with potential drilling service companies.
The quality and availability of suitable rental rigs in the Middle East has led the Company and its partners to decide to purchase a drilling rig. A new 750 horse power drilling rig was identified in the region and Sonoro is in the final stages of completing an extensive rig inspection, in addition to having had the vendor perform extensive commissioning work to prepare the rig for operations in the province of Salah ad Din. The Company determined that this rig is of superior quality to the currently available rental rigs in the region and can operate at competitive market day rates. In addition, the Company believes that owning a rig is more beneficial with respect to mobilization and lead times and provides more flexibility and control for its future drilling programs. Finally, the ability to finance the majority of the drilling rig purchase price at competitive terms made the rig purchase option attractive from a financial perspective. The purchase of the rig is subject to certain conditions, including final technical acceptance of the drilling rig by Sonoro.
The Partners are in the process of establishing the JV Co to own and operate the rig. Sonoro, through a wholly-owned subsidiary, will own 40% of JV Co and Geopetrol and Berkeley will own 40% and 20% of the JV Co respectively. The Partners have committed to contributing sufficient equity (in proportion to their respective JV Co interests) to fund 36% of the rig purchase price plus additional capital to cover initial operations. Sonoro's contribution will be approximately $US 1,000,000 to the equity of JV Co. The remaining 64% of the rig purchase price is being financed by a loan facility to JV Co from an affiliate of Geopetrol and will have a term of two years at an interest rate of 6% per annum, secured by the drilling rig.
Richard Wadsworth, Sonoro Chairman & CEO said "We are very pleased to have agreed to the purchase of this new drilling rig with our partners. This was a long and carefully considered process with our partners and we are pleased to have settled on the purchase of a brand new drilling rig. We expect that having our own drilling rig will also allow for greater efficiency and control, as well as savings on our subsequent drilling programs on additional resource opportunities that we have identified".
Sonoro is an international oil exploration and development company. Our current focus is on asphalt (heavy oil) resource exploration and development in Iraq. Sonoro has initiated the evaluation of resource opportunities under our asphalt license agreement in the Salah ad Din Province.
Sonoro plans to drill exploration wells in the North Salah ad Din prospect ("NSD") in the Salah ad Din Province in the Republic of Iraq. An initial development program to develop NSD and a further exploration program, including extensive sub-surface data acquisition, in the Salah ad Din Province have been developed and are planned to be executed following the above exploration drilling program.
Forward Looking Information
This press release contains forward looking information, including but not limited to Sonoro's planned drilling rig purchase and exploration and development activities. The forward looking information is based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to risks associated with the oil and gas industry (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 resource estimates; the uncertainty associated with geological interpretations; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, risks associated with the implementation of new technology, risks associated with obtaining, maintaining and the timing of receipt of regulatory approvals, permits, and licenses, uncertainties relating to access to capital markets, in-country political risks and the risk of volatile global economic conditions.
Due to the risks, uncertainties and assumptions inherent in forward looking information, prospective investors in the company's securities should not place undue reliance on forward looking information. Forward looking information contained in this press release is made as of the date hereof and are subject to change. The company assumes no obligation to revise or update forward looking information to reflect new circumstances, except as required by law.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information:
CHAIRMAN & CEO