Pacific Acquires the Remaining 50% Working Interest in the CPE-6 Block

Source: www.gulfoilandgas.com 12/21/2015, Location: South America

Pacific Exploration & Production Corp. through its wholly-owned subsidiary Meta Petroleum Corporation (Meta) has reached an agreement with Talisman Colombia Oil & Gas Ltd. (Talisman) to acquire the remaining 50% working interest held by Talisman in the CPE-6 Block in Colombia.

Ronald Pantin, Chief Executive Officer of the Company, commented: "This acquisition consolidates an important new heavy oil discovery in Colombia. Our net production before royalty will increase to 100% minus Variable Monthly Payments equal to 4 percent, which has an immediate positive impact on cash flow and doubles our net reserves in the Block without an initial cash outlay. Cash payments will be distributed in three tranches based on accumulated gross production thresholds of the Block. The first phase facilities are built and operating providing infrastructure to significantly increase production. The Company is looking forward to drilling and developing this heavy oil asset to its full potential, which contains a large amount of oil in place."

The price to be paid by the Company to Talisman for the 50% working interest will be comprised of a royalty and cash payments based on production thresholds from the Block. Total cash consideration is entirely contingent on cumulative production and capped at U.S.$48 million (the "Maximum Price") calculated as follows:

- Variable Monthly Payments equal to four percent (4%) of the Monthly Net Total Production multiplied by an Applicable Price per Barrel; and

- Cash payments distributed in three tranches: (i) U.S.$5 million payable once the accumulated gross production of the Block reaches a total of 5 million barrels ($1/bbl); (ii) a second U.S.$5 million once the accumulated gross production of the Block reaches a total of 10 million barrels ($1/bbl); and (iii) a final U.S.$5 million, once the accumulated gross production of the Block reaches a total of 20 million barrels ($0.50/bbl). Any tranches of the cash consideration are subject and limited to the aggregate of such cash payments and Variable Monthly Payments reaching the Maximum Price of U.S.$48 million.

The CPE-6 Block is located in the highly prolific southern Llanos Basin of Colombia. The Contract covers an area of approximately 240,000 hectares and lies along the regional heavy oil trend approximately 70 kilometres southwest of the Company's operated Rubiales and Quifa SW heavy oil fields. Block CPE-6 was initially awarded by the Agencia Nacional de Hidrocarburos of Colombia (the "ANH") to the Meta-Talisman consortium in 2008 under a Technical Evaluation Agreement ("TEA"), which covered an area of over 600,000 hectares. However in 2011, Meta and Talisman exercised the contractual right to convert part of area covered by the TEA into an E&P contract. In late 2014, Phase 1 of facility construction was completed, providing infrastructure to handle 25,000 bbl/d of nominal fluid capacity with a crude oil processing capacity of 8,000 bbl/d of oil. As of December 31, 2014, the CPE-6 Block was estimated to contain 38 MMbbl of 2P reserves as evaluated by an independent third party evaluator.

The Agreement will be effective on December 17, 2015; however, the assignment of the Block is subject to ANH approval.


Senegal >>  10/18/2021 - Highlights
- Completion of Senegal RSSD sale to Woodside and sale proceeds of US$126 million received
- Drilling of Bambo-1 well, offshore...

Australia >>  10/15/2021 - Bounty Oil and Gas NL will acquire a 25% Strategic Interest in 4 Drill Ready Shallow Water Carnarvon Basin Oil Exploration Licences in Western Austral...

United Kingdom >>  10/15/2021 - Viaro Energy, the independent British energy company operating in Europe, has announced that its wholly owned subsidiary, RockRose Energy has complete...
Brazil >>  10/14/2021 - Petrobras, regarding the pieces of news in the media about the sale of onshore production fields, located in the Recôncavo and Tucano Basins, in the s...

Ghana >>  10/13/2021 - Occidental has agreed to sell its interests in two Ghana offshore fields for $750 million to Kosmos Energy ($550 million) and Ghana National Petroleum...
Ghana >>  10/13/2021 - Kosmos Energy has acquired an additional 18.0% interest in the Jubilee field and an additional 11.0% interest in the TEN fields in Ghana from Occident...

Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


Gulf Oil and Gas
Copyright © 2021 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.