Santa Maria Petroleum Inc.
TSX VENTURE : SMQ

Santa Maria Petroleum Inc.

May 02, 2013 17:18 ET

Santa Maria Petroleum Inc. Announces Its Audited Results for the Year Ended December 31, 2012

CALGARY, ALBERTA--(Marketwired - May 2, 2013) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Santa Maria Petroleum Inc. (formerly Quetzal Energy Ltd.) (TSX VENTURE:SMQ) announces that its audited results for the year ended December 31, 2012 were posted on SEDAR on April 30, 2013. Also, its annual NI-50-101 F1, F2, F3 Reserve Information reports were filed SEDAR on April 30, 2013.

HIGHLIGHTS DURING THE YEAR ENDED DECEMBER 31, 2012 AND SUBSEQUENT

HIGHLIGHTS DURING 2012

  • On January 25, 2012 Santa Maria sold all of its Guatemalan operations in order to focus its efforts on the Colombian operations. The purchaser acquired all of the outstanding common shares of Quetzal Energy Inc., a wholly owned subsidiary of Santa Maria which in turn owns all of the outstanding common shares of Quetzal Energy (Bahamas) Ltd. (QEG), owner and operator of the Guatemalan blocks. Consideration received in the sale was comprised of cash of $1,500,000 and a 10% carried interest in the first two wells to be drilled by the purchaser on the Guatemalan properties. Santa Maria received $500,000 upon closing the agreement and the remaining $1,000,000, together with a reimbursement of certain expenses was received on February 20, 2013. The purchaser assumed all liabilities and obligations associated with the property, regardless of whether they arose prior to or after the sale.

  • In order to focus capital expenditures on the Canaguaro block and Block 27, the Company entered into an agreement with Omega Energy Colombia to renegotiate its farm-in arrangement at Block 21, whereby Santa Maria will cap its capital expenditure commitment to an agreed amount in return for reduced production income participation. Under the terms of the original farm-in agreement, Santa Maria was to pay 50% of two wells in exchange for an income production participation of 35%. Under the new arrangement, Santa Maria will pay a maximum of $3,875,000 towards the two wells and will have the option, following the completion of those wells, to: (a) waive any right to an income production participation going forward and have no further financial obligations; or (b) retain a 24.75% income production participation in the block by reimbursing Omega Energy Colombia for its incurred cost in the two wells, such that Santa Maria will have paid 50%.

  • The Company encountered a challenge with the Canaguay-1 well on the Canaguaro Block. Significant emulsions in the fluids and wax build-up in late 2011 and through 2012 placed sever strain on the electric submersible pump causing the well to be shut in for well cleaning and de-scaling and repairs to and replacement of the pump during four workovers in 2012. The last workover was completed on October 1, 2012 and the well has produced consistently at approximately 450-500 bopd with a 60% watercut for the six months since. Santa Maria has a 25% working interest in the Canaguaro block.

  • The Block 27 joint venture successfully met the Phase 1 work commitments to process and interpret 474 km of 2D seismic and drill one exploration well. It has entered the second exploration phase which carries a commitment to drill two more exploration wells and acquire, process and interpret 20 km of 2D seismic by February 2015.

  • On April 23, 2012, Santa Maria announced that NCT Energy Group C.A. Colombia, as official Operator of the Llanos 27 Block, along with Santa Maria and its partners, commenced drilling the Flami-1 well on the Llanos 27 Block in the Llanos Basin of Colombia. The well was successfully drilled to a total depth of 9,300 ft. on May 31, 2012. On June 21, 2012 the Company announced a new oil discovery in the Une formation of the Flami-1 well. The Company is paying 50% of the gross amount to earn a private participating interest of 45.275% before payout and 34.25% after payout.

  • On May 31, 2012 the Company received approval from its shareholders at the special annual shareholders' meeting to change the name of the Company to Santa Maria Petroleum Inc.

  • On May 31, 2012 the company received approval from its shareholders to consolidate the issued and outstanding Common Shares on the basis of one post-consolidated Common Share for every 10 pre-consolidation Common Shares. The 600,764,492 pre-consolidation Common Shares that were outstanding have been reduced to 60,076,449 post-consolidation Common Shares. Accordingly, all employee and officer stock options and the share and per share disclosures in the December 31, 2912 condensed interim financial statements and this MD&A have been revised to reflect the consolidation of shares for all periods presented.

HIGHLIGHTS SUBSEQUENT TO THE 2012 YEAR END

  • On February 20, 2013 Santa Maria received $1,121,445 as the final payment for the sale of the Guatemalan exploration properties.
  • On February 22, 2013 Santa Maria remitted $1,250,000 to the operators of the LLA-21 block in Colombia as the second installment pursuant to the Amending Agreement to the original Participation Agreement for Block 21.
  • On February 26, 2013 the operator of Block 21 commenced drilling the Calacho-1 well, the first exploration well on this block. Total depth of 7,000 was reached on March 2, 2013. The well was cased and closed off so that the rig could move to the site of the Rocamao well, the second exploration well on this block. Testing of the well will be carried out after the second well is completed
  • On March 14, 2013 the operator of Block 21 commenced drilling the Rocamao well, the second exploration well on this block. Total depth of 7,870 was reached on March 27, 2013 and the well was cased and closed. Testing of the well has not been completed. Santa Maria believes that this completes its work commitment for the LLA-21 block.

Forward Looking Statements - Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Quetzal, including, but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with oil and gas activities, currency fluctuations, dependence upon regulatory approvals, the availability of future financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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