Petrominerales Ltd.

Petrominerales Ltd.

May 06, 2013 22:44 ET

Petrominerales Acquires 87.5% Interest in Canaguaro Block

CALGARY, ALBERTA--(Marketwired - May 6, 2013) - Petrominerales (TSX:PMG) (BVC:PMGC) is pleased to announce the acquisition of an 87.5 percent interest the Canaguaro Block in the Llanos Basin of Colombia.


Petrominerales has entered into binding agreements to purchase an 87.5 percent interest in the Canaguaro Block, subject to approval from Colombia's National Hydrocarbon Agency (ANH) and other customary closing conditions, for cash consideration of US$15.95 million, plus a commitment to carry our joint venture partner on their first US$5.3 million of costs. The Canaguaro Block has one producing oil field that was discovered in November 2010 with the Canaguay-1 well. Upon closing the acquisition, Petrominerales will become the operator of the block. The Canaguaro acquisition has the following characteristics:

Current Production(1): 416 barrels of 23 degree API gravity oil/day
Proved Reserves(2): 1,194 Mbbls
Proved plus Probable Reserves(2): 2,277 Mbbls
Proved plus Probable Reserves Life Index: 15 years
Undeveloped Land: 5,621 acres
3D Seismic: Complete coverage of the Canaguaro Block


(1) Average daily production of Canaguay-1 well for the month of April 2013, Petrominerales working interest share (87.5%).

(2) Reserves were evaluated ("the Petrotech Report") for Santa Maria Petroleum Inc. by Petrotech Engineering Ltd. ("Petrotech"), an independent qualified reserves evaluation, as at December 31, 2012. Figures, including undeveloped land, in this press release are presented on a Petrominerales working interest share (87.5%).


The transaction metrics for the long reserve life acquired production, on a working interest basis, are:

Production: $51,020 per barrel of oil per day
Proved plus Probable Reserves: $9.33 per barrel
Proved plus Probable Reserves, including FDC(1) $24.57 per barrel


(1) Future development costs ("FDC") consists of capital expenditures relating to producing the proved plus probable reserves, as estimated in the Petrotech report.


Our acquisition of an interest in the Canaguaro Block is strategic for a number of reasons, including adding to our existing production and reserves and providing a large, contiguous area of underexplored land located adjacent to our Blocks 25 and 31. We believe the Canaguaro Block is strategically located on the same fault trend as other oil fields to the south of the block, including the Balay discovery and our Corcel and Guatiquia discoveries.

We plan to drill up to two wells in 2013 on the Canaguaro Block and plan to commence drilling operations on the first well during the third quarter of 2013.

Petrominerales Ltd. is an international oil and gas company operating in Latin America since 2002. Our high-quality land base and multi-year inventory of exploration and development opportunities in Colombia, Perú and Brazil provide long-term growth potential for years to come.

Forward-Looking Statements and Cautionary Language. Certain information provided in this press release constitutes forward‐looking statements. Specifically, this press release contains forward‐looking statements relating to the Company's future exploration and development activities and the timing for bringing wells on production. The forward‐looking statements are based on certain key expectations and assumptions, including expectations and assumptions concerning the availability of capital, the success of future drilling and development activities, the performance of existing wells, the testing and performance of new wells, prevailing commodity prices and economic conditions, the availability of labour and services, the ability to transport and market our production, timing of completion of infrastructure and transportation projects, weather and access to drilling locations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. You can find a discussion of those risks and uncertainties in our Canadian securities filings. Such factors include, but are not limited to: general economic, market and business conditions; fluctuations in oil prices; the test results and performance of exploration and development drilling, recompletions and related activities; timing and rig availability; availability of transportation and offloading capacity, outcome of exploration contract negotiations; fluctuation in foreign currency exchange rates; the uncertainty of reserve estimates; changes in environmental and other regulations; risks associated with oil and gas operations; and other factors, many of which are beyond the control of the Company. There is no representation by Petrominerales that actual results achieved during the forecast period will be the same in whole or in part as those forecast; and there is no representation by Petrominerales that the test results of any new exploration well or development well is necessarily indicative of long-term performance or ultimate recovery. Except as may be required by applicable securities laws, Petrominerales assumes no obligation to publicly update or revise any forward‐looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

Contact Information

  • Petrominerales Ltd.
    Corey C. Ruttan
    President and Chief Executive Officer
    403.705.8850 or 011.571.629.2701

    Petrominerales Ltd.
    John Koch
    Chief Operating Officer
    403.705.8850 or 011.571.629.2701

    Petrominerales Ltd.
    Kelly D. Sledz
    Chief Financial Officer
    403.705.8850 or 011.571.629.2701