Petrominerales Ltd.

Petrominerales Ltd.

July 24, 2012 20:10 ET

Petrominerales Announces Closing of Veraz Peru Acquisition and Provides an Update on Sheshea 1X Exploration Well

CALGARY, ALBERTA--(Marketwire - July 24, 2012) - Petrominerales Ltd. ("Petrominerales" or the "Company") (TSX:PMG)(BVC:PMGC) is pleased to announce the completion of the previously announced acquisition of Veraz Petroleum Peru S.A.C. ("Veraz Peru"), a wholly-owned subsidiary of Veraz Petroleum Ltd. ("Veraz"), pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (the "Sale Transaction"). The Sale Transaction was approved by 98 percent of the votes cast by Veraz shareholders at the annual general and special meeting of Veraz held today.

Pursuant to the terms of the Sale Transaction, Petrominerales acquired Veraz Peru for total consideration of US$5.0 million, which was satisfied by the issuance of 524,871 common shares ("Petrominerales Shares") of Petrominerales. A total of 314,716 Petrominerales shares, or 0.00588 of a Petrominerales share for each Veraz share held (subject to rounding), will be distributed to Veraz shareholders as a return of capital as at July 24, 2012. Veraz intends to use the remaining 210,155 Petrominerales Shares to fund its transaction costs and other liabilities, its continuing obligations as a public company, and the pursuit of new business opportunities.

The distribution of the Petrominerales Shares to Veraz shareholders is expected to be completed on or about July 27, 2012. Following the distribution, most registered Veraz shareholders will receive a statement from our transfer agent, Computershare Trust Company of Canada, confirming particulars of their ownership of Petrominerales Shares in Computershare's Direct Registration System (DRS). Veraz shareholders who do not hold Veraz Shares in their own names should contact their broker for further details regarding the process by which the Petrominerales Shares will be deposited into their accounts.

Sheshea 1X Exploration Well, Block 126, Peru

We are pleased to announce that our Sheshea 1X well has commenced drilling. We anticipate drilling and testing of Sheshea 1X to be completed in the fourth quarter of 2012, and are planning to test up to five reservoir intervals in this well. The Sheshea prospect is a potentially large, 10,000 acre, closed structure with multiple reservoir opportunities located approximately 50 kilometres south of our first exploration well, La Colpa 2X. Based on our geological and geophysical analysis, we estimate that the prospect could potentially contain over 100 million barrels of undiscovered petroleum initially-in-place ("UPIIP"). Petrominerales has 100 percent interest in this Block.

Petrominerales Ltd. is an international oil and gas company operating in Latin America since 2002. Today, Petrominerales is one of the most active exploration companies and one of the largest oil producers in Colombia. Our high quality land base and multi-year inventory of exploration opportunities provides long-term growth potential for years to come.

Forward‐Looking Statements. 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 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 results 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. 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.

Undiscovered Petroleum Initially-In-Place ("UPIIP"). UPPIP, equivalent to undiscovered resources, are those quantities of petroleum that are estimated, on a given date, to be contained in accumulations yet to be discovered. The recoverable portion of UPIIP is referred to as prospective resources, the remainder as unrecoverable. Undiscovered resources carry discovery risk. There is no certainty that any portion of these resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. A recovery project cannot be defined for this volume of UPIIP at this time.

Contact Information

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

    Petrominerales Ltd.
    Jack F. Scott
    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