Panorama Petroleum Inc.
TSX VENTURE : PPA

September 29, 2014 13:36 ET

Panorama Signs an MOU for an Oil Block in Sudan and Update

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 29, 2014) - Panorama Petroleum Inc. ("Panorama" and/or the "Company") (TSX VENTURE:PPA) reports that it has entered into a Memorandum of Understanding ("MOU") with State Petroleum Overseas Inc. ("State"), a private non-arms length British Columbia corporation to acquire one hundred percent (100%) of the shares of State from the State shareholders subject to certain conditions precedent. State is a signatory to an Exploration and Production Sharing Agreement ("EPSA") with the Government of the Republic of Sudan on Block 26 D/E (formerly Block 7) Rawat Basin, North Sudan covering an area of 25,529 km sq. pursuant to which State holds a 50% interest in Block 26 D/E.

Block 26D/E is situated in the south-east of North Sudan and the area is readily accessible. An existing pipeline that connects to the export pipeline to Port Sudan runs through the Block and a Central Processing Facility (CPF) is also located within the boundary of the Block.

Rawat Basin: The basin is within the White Nile Rift System and is analogous to the northern extension of the Melut Basin. The Melut Basin has a significant number of producing wells. Both Cretaceous and Tertiary Strata are preserved in the Rawat Basin and they attain maximum thickness of more than 5,000 m. adjacent to master normal faults. The reservoir rock is sandstone with shales, with good reservoir parameters and the Block is viewed by State as highly prospective and substantially de-risked due to the existence of two discovery wells.

Existing Data: The block has extensive seismic coverage, both 2D and 3D, in addition to other geological and geophysical data. Various prospects and leads have been seismically identified according to State.

Discovery Wells: Block 26D has 2 discovery wells with light 30° (+/-) API crude oil. The well depths are (+/-) 1,800 m. The reserve/potential resource estimates are subject to an independent NI 51-101 compliant technical report.

The MOU conditions precedent are (1) the execution of a Definitive Agreement that establishes, in part, the consideration to be paid by Panorama to the State shareholders; (2) Panorama obtaining TSX Venture Exchange approval to the terms and conditions of the Definitive Agreement and completing, with TSX Venture Exchange approval, a private placement in an amount to be defined in the Definitive Agreement and (3) Panorama obtaining its Board of Directors approval.

Management has prior experience in Sudan through the development of the Heglig and Unity fields which were brought through to production.

Panorama further reports that a Shares-for-Debt Agreement has been reached with Maverick Petroleum Ltd. (a creditor) for a $675,000 debt through the issuance of 3,000,000 common shares at $0.225 per common share. Panorama has received TSX Venture Exchange approval for this shares-for-debt conversion. All common shares to be issued in this transaction will be subject to a four month hold period.

Although the Catalca Licence, Thrace Basin, Turkey was extended to October 2015 following the Q1 2013 natural gas discovery well (Cayirlik-1), as gazetted by the Turkish licencing regulatory authority the General Directorate of Petroleum Affairs (GDPA), the Company received information that the GDPA recently terminated the licence pursuant to the new May 30, 2013 Turkish Petroleum Law after putting the Company's Turkish partner and licence operator, who held a 55% interest in the Catalca Licence, on notice that the licence may be subject to termination pursuant to the terms and conditions of the new petroleum law.

The Company's Turkish partner, under the terms of the Definitive and Joint Operating Agreements, held the Company's 45% licence interest in trust as a fiduciary but failed to inform the Company of the GDPA notifications thereby denying the Company the opportunity of taking the necessary corrective measures.

The Company, through its Turkish legal counsel, has put the former Turkish partner on notice that the Company reserves all its legal rights and the Company's Turkish legal counsel has been instructed to take the necessary legal action.

Panorama, on learning of the licence status, held detailed discussions with the GDPA in Ankara, Turkey. Subsequently the Company filed the required corporate qualification documents along with an application to obtain 100% of the licence covering an extended area of 80,125 acres with the GDPA and the GDPA has approved the Company for purposes of the licence application which application is being processed.

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 or the adequacy or accuracy of this release. Certain information provided in this news release contains forward-looking statements that by their nature are subject to numerous risks and uncertainties and readers are cautioned that actual results may vary considerably from those forecasted.

Contact Information

  • Panorama Petroleum Inc.
    Dr. Waseem Rahman
    President
    (604) 684-2401
    (604) 684-2407 (FAX)