Santa Maria Petroleum Inc.
TSX VENTURE : SMQ

Santa Maria Petroleum Inc.

November 25, 2013 07:00 ET

Santa Maria Petroleum Inc. Disposes of Its Participation Interest in the Investments, Income and Revenues of the LLANOS 27 Project in the Llanos Basin in Colombia

TORONTO, ONTARIO--(Marketwired - Nov. 25, 2013) -

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

Santa Maria Petroleum Inc. (TSX VENTURE:SMQ) ("Santa Maria" or the "Company") today announces that on November 21, 2013, it entered into a Share Purchase Agreement (the "Share Purchase Agreement") with Global Oil & Gas Services Ltd. ("Global"), a company incorporated pursuant to the laws of Dubai, UAE, by which Global will acquire all of the shares of a newly incorporated wholly owned subsidiary of Santa Maria ("Newco"). Through a reorganization to be completed by December 18, 2013, Santa Maria shall transfer to Newco the assets and liabilities of its Colombian branch, including its participation interest in the investments, income and revenues of the LLANOS 27 Project in the Los Llanos Basin in Colombia (the "Project"), subject to a working capital adjustment. Under the working capital adjustment, Newco will have a cash balance of $US450,000 and all amounts receivable including refundable VAT and income tax amounts will be paid to Santa Maria. Santa Maria will pay all outstanding trade liabilities incurred to the closing date.

Under the Share Purchase Agreement, Global shall replace the $US1.85 million Letter of Credit that had been provided by Santa Maria to the Agencia Nacional de Hidrocarburos (the "ANH") in order to guarantee the operator's work commitments on this project. This Letter of Credit is currently secured by a guaranteed investment certificate. When the Letter of Credit is released and the working capital requirement is funded, the remaining funds, approximately $1.4 million will be transferred to the Company's general cash balances.

The foregoing transaction constitutes a sale of all or substantially all of the property and assets of the Company. The Share Purchase Agreement is subject to various conditions including but not limited to receiving the approval of the Company's shareholders (the "Shareholders") and the TSX Venture Exchange (the "TSXV"). Notice of a special Shareholder meeting will be made in due course.

Following the sale of Newco and the effective transfer of its interest in the Project, Santa Maria will have disposed of all its interests in Colombia and will have no further work commitments or financial obligations arising from its former interests in Colombia. Management will assess the options for the Company upon closing of the Global transaction.

About Santa Maria Petroleum Inc.

Santa Maria is a junior oil and gas company with a private participating interest in the LLA27 Block in the Llanos Basin of Colombia.

Cautionary Statements

This news release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws (together, "forward-looking information"). The use of any of the words "expect", "anticipate", "continue", "estimate", "believe", "plans", "intends", "confident", "may", "objective", "ongoing", "will", "should", "project", "should" and similar expressions are intended to identify forward-looking information.

The forward-looking information is based on certain key expectations and assumptions made by Santa Maria, including expectations and assumptions concerning the operational results in Colombia and the sale of its private participating interest in the Project. Although Santa Maria believes that the expectations and assumptions on which the forward-looking information are based are reasonable, undue reliance should not be placed on the forward-looking information because Santa Maria can give no assurance that they will prove to be correct.

Since forward-looking information addresses future events and conditions, by its very nature it involves inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, Shareholder, TSXV and ANH approval of the transaction, ANH approval of the transaction, the inherent risks involved in the exploration and development of oil and gas properties, the uncertainties involved in interpreting drilling results and other geological data, uncertainties relating to fluctuating oil and gas prices, the possibility of cost overruns or unanticipated costs and expenses and other factors including unforeseen delays. Anticipated exploration and development plans relating to Santa Maria's properties are subject to change.

The foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking information contained in this press release is made as of the date hereof and Santa Maria undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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 FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Mr. Ron MacMicken
    President and Chief Executive Officer
    416-902-8099