Vast Exploration Inc.

Vast Exploration Inc.

April 20, 2011 12:31 ET

Vast Exploration Inc.-Announces 10% Acquisition of Exploration Block in the Putumayo Basin of Colombia

CALGARY, ALBERTA--(Marketwire - April 20, 2011) - Vast Exploration Inc. ("Vast" or the "Company") (TSX VENTURE:VST) is pleased to announce that it has signed a Hydrocarbon Exploration and Production Contract (the "E&P Contract") with the Agencia Nacional de Hidrocarburos of Colombia ("ANH") for oil and gas exploration block PUT-03 (the "Block"). The Block was successfully won by the Company during a bid round held on June 22, 2010, in Cartagena, Colombia (the "Bid"). The Company has also agreed to farm-out a 90% interest in the Block to wholly-owned subsidiary of Sagres Energy Inc. ("Sagres") in consideration for the Company retaining a 10% carried interest during the first exploration phase (the "Carried Interest"), which phase shall consist of a minimum expenditure of US$12.9 million over a 36 month period.
The block has an area of 148,000 acres (gross) and is located in the Putumayo Basin of Columbia. The Block offers exploration upside on a structural trend with existing discoveries, and is situated strategically between two blocks (CAG-6 and PUT-09 ) awarded to Pacific Rubiales and Talisman Energy, respectively (Figure 1).

To view: Figure 1: PUT-3 Location Map, please visit the following link:

The Block carries a royalty of 7% payable to the Government of Colombia in addition to the basic royalty scheme established under Colombia Law, being 8% for up to 5,000 bopd and increasing to 25% for a 600,000 bopd field. All other terms of the contract are standard to the model Colombian E&P Contract. Sagres will have an option to acquire the Company's Carried Interest in the Block over the next twelve months at a price to be mutually agreed.

In 2010, Vast entered into a Letter of Intent with a private company ("Ontario Co."), whereby it would be granted a 90% interest in the Block in consideration for paying to Vast a fee of US$50,000, taking responsibility for 100% of the costs of the first exploration phase and reimbursing Vast for all expenses of the Bid and granting Vast the Carried Interest (the "LOI"). Ontario Co. was subsequently acquired by Sagres.

The transaction may be considered a Non-Arm's Length Transaction pursuant to the policies of the TSX Venture Exchange because Vast and Ontario Co. had a common officer, Ahmed Said, at the time the terms of the LOI were negotiated. Vast and Sagres are arm's length parties. Closing of the transaction remains subject to all requisite approvals, including without limitation, approval of the TSX Venture Exchange.

Ahmed Said, President and Chief Executive Officer of Vast stated, "We are pleased with the successful award in Colombia. The Carried Interest provides our shareholders with additional upside potential, without committing additional capital and while keeping our strategic focus on our primary asset in Kurdistan."

About Vast Exploration Inc.

Vast Exploration Inc. is an independent oil and gas company. Vast is focused on the exploration and development of its principal asset, the Qara Dagh Block, in the Kurdistan region of Iraq, where it holds a net undivided 37% working interest in the block. The Qara Dagh Block lies on trend with existing discoveries and is located in the prolific Zagros Fold Belt of Northern Iraq, which contains several large fields including the super-giant Kirkuk field.

This press release contains "forward looking information" within the meaning of applicable Canadian securities legislation. Forward looking information includes, but is not limited to, statements with respect to the effect of the successful bid and 10% Acquisition on the Company. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Resource estimates are based on assumptions and parameters agreed upon, and considered reasonable, by the management of the Company and the other companies with interests in the Block. Statements regarding timetable of future exploration of the Block are based on the plans set by the companies with interests in the Blocks. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. For a description of some of such risks, please see the Company's annual information form filed under the profile of the Company on SEDAR. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.


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