SOURCE: La Cortez Energy

La Cortez Energy

March 05, 2010 09:00 ET

La Cortez Energy Closes Acquisition of Avante Petroleum Colombia Limited and Concurrent $10MM Financing

Avante Invests $5.0 Million in La Cortez; Avante to Continue as a Working Interest Partner in the Acquired Catatumbo Assets

BOGOTA, COLOMBIA--(Marketwire - March 5, 2010) -  La Cortez Energy, Inc. ("La Cortez" or the "Company") (OTCBB: LCTZ) and Avante Petroleum S.A. ("Avante") are pleased to announce the signing of a stock purchase agreement for and simultaneous closing of La Cortez' acquisition of Avante's subsidiary Avante Colombia S.a.r.l. ("Avante Colombia") in exchange for common stock of La Cortez. The purchase includes Avante Colombia's Colombian branch, Avante Colombia Ltd Sucursal. Avante holds interests in oil fields covering 11,535 acres in the Catatumbo region in northeast Colombia.

Avante Colombia currently has a 50% participation interest and is the operator of the Rio de Oro and Puerto Barco production contracts with Ecopetrol in the Catatumbo area, under an operating joint venture with Vetra Exploracion y Produccion S.A. Independent engineering reports on behalf of Avante have estimated a total resource potential of approximately 1.4 million barrels of oil. (La Cortez has not yet audited such reserves in conformity with US GAAP.) Under the terms of the stock purchase agreement, La Cortez and Avante have also agreed to enter into a joint venture to develop further exploration opportunities in Colombia.

The main terms of the transaction are:

  1. La Cortez has acquired 100% of the outstanding stock of Avante Colombia from Avante in exchange for 10,285,819 common shares of La Cortez.

  2. Avante has invested $5.0 mm in a units offering of common equity of La Cortez at a price of $1.75 per unit (for a total of 2,857,143 units), with each unit consisting of one share of La Cortez common stock and a three-year warrant to purchase one share of common stock exercisable at $3.00 per share. 

  3. Avante intends to continue to participate as a working interest partner in the development of the acquired Catatumbo assets.

La Cortez also welcomes the nomination of Mr. Alexander Berger, the CEO of Oranje Nassau Energie B.V., to the Board of Directors of La Cortez. Mr. Berger has a career of over 15 years in the oil and gas industry, having started his career at Shell International. As CEO of Oranje-Nassau Energie, a privately held independent oil and gas company based in Amsterdam, he is responsible for managing a portfolio of properties that currently include positions offshore Netherlands, the United Kingdom and Gabon with a developed reserve base of approximately 20 million BOE and current production of 7,000 BOE per day.

Simultaneously with the closing of the Avante purchase, La Cortez completed a private placement for an additional $5.0 million in a units offering to accredited investors at a price of $1.75 per unit (for a total of 2,857,143 units). (This amount includes $2.5 million that closed on December 29, 2010, and approximately $1.0 million that closed in January 2010, as previously reported.) Each unit consists of one share of common stock and a three year warrant to purchase one half share of common stock exercisable at $3.00 per whole share. Haywood Securities Inc. provided $2.5 million.

The proceeds of the financings be used for general corporate purposes including, but not limited to, the development of the assets of Avante Colombia.

After giving effect to the acquisition of Avante Colombia and the investments by Avante and the other investors, Avante owns approximately 33% of the shares of La Cortez common stock outstanding.

Marcel van Poecke, a principal shareholder and Chairman of the Board of Avante S.A. and Oranje-Nassau Energie B.V., said, "We are very pleased with this transaction, which provides us with a platform for growth in Colombia, which we have long identified as a geographic priority given the country's substantial undeveloped hydrocarbon potential and attractive fiscal and regulatory framework. We will focus on contributing to La Cortez in developing the Avante Colombia assets together with our partner Vetra and on further expanding in Colombia. Our confidence as key shareholders in the future of La Cortez and its management team is further underscored by our capital commitment, which will allow La Cortez to aggressively pursue additional development and exploration opportunities."

Andres Gutierrez, President and CEO of La Cortez, commented on the announcement, "We are very pleased to have concluded this transaction. We have already commenced the execution of our plans to continue the development of the Avante Colombia assets. We are very enthusiastic about the potential of these blocks. In addition, we welcome our new shareholders and board member, and we have great expectations about their contribution in searching for new opportunities as well as in the development of our current assets. We anticipate this transaction will create benefits for all our different stakeholders."

Macquarie Capital acted as financial advisor to La Cortez in connection with its acquisition of Avante Colombia.

About La Cortez Energy, Inc.
La Cortez Energy, Inc. is an early stage oil and gas exploration and production company currently pursuing a business strategy in the energy sector in South America, with an initial focus on identifying oil and gas exploration and production opportunities in Colombia. To that end, the Company has established a branch, La Cortez Energy Colombia, Inc., with offices in Bogota, Colombia, and recently signed a Joint Operating Agreement for a 50% working interest in the Putumayo-4 block and a farm-in agreement for a 20% working interest in the Maranta block, both in Colombia.

About Avante Petroleum S.A.
Avante Petroleum S.A. is an independent Petroleum Exploration and Production Company based in Luxembourg, with hydrocarbon interests in Colombia, Brazil and Mexico.

Marcel van Poecke is a key Avante shareholder and Chairman of the Board of Avante Petroleum S.A.

About Oranje-Nassau Energie B.V.
Oranje-Nassau Energie B.V. (www.onebv.com), a private Dutch exploration and production company, with a long track record of running a diversified upstream portfolio, was retained by Avante Petroleum S.A. as an advisor and a technical consultant to the transaction. Through its CEO as a newly to be appointed Board Member it will continue to represent the interests of Avante as the largest shareholder in La Cortez.

About Alexander Berger, CEO of Oranje-Nassau Energie B.V.
Mr. Berger holds a MSc degree in petroleum engineering from Delft University and an MBA degree from the Rotterdam School of Management. He worked for Shell International, holding several technical and commercial positions in the United Kingdom and the Netherlands. In 2000, he joined SHV Holdings, as the Commercial Manager of its E&P subsidiary Dyas. He was instrumental in doubling the oil and gas portfolio of Dyas through numerous successful North Sea and overseas acquisitions. In 2007 Mr. Berger was appointed Managing Director of Dyas while at the same time holding several non-executive directorships on behalf of the company. After leading a consortium composed of Dyas, ONH and Sumitomo, which successfully acquired the energy interests of the Wendel-owned Oranje-Nassau Group, Mr. Berger left Dyas in June 2009 to become the new CEO of Oranje-Nassau Energie B.V.

For more information, please contact the Company's Investor Relations department at +1-256-438-5430 or by email info@lacortezenergy.com

www.lacortezenergy.com

Forward-Looking Statements
Certain statements in this news release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties. Words such as "expects", "intends", "plans", "proposes", "may", "could", "should", "anticipates", "estimates", "likely", "possible", "potential", "believes" and words of similar import also identify forward-looking statements. Forward-looking statements are based on current facts and analyses and other information and assumptions of management. The proposed acquisition of Avante Colombia is subject to a number of conditions which may not be satisfied, and there can be no assurance that it will be consummated, nor can there be any assurance that the Rio de Oro and Puerto Barco exploration and production contracts will be successfully developed. Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the Company, including, but not limited to, the Company's ability to identify other corporate acquisition and/or joint venture opportunities in the energy sector in Colombia, Peru and Brazil and, more generally, in Latin America, and to establish the technical and managerial infrastructure, and to raise the required capital, to take advantage of, and successfully participate in such opportunities, future economic conditions, political stability and energy prices. Additional information on risks and other factors that may affect the business and financial results of the Company can be found in filings of the Company with the U.S. Securities and Exchange Commission.

Contact Information

  • CONTACT:
    Investor Relations department of La Cortez Energy, Inc.
    +1-256-438-5430
    Email Contact