Field Already Producing Approximately 1,300
bbls/day
VANCOUVER, Nov. 23, 2017 /CNW/ - PentaNova Energy Corp. (the
"Company") (TSXV: PNO), today signed the final agreement
with Argentina's National Oil
Producer YPF ("YPF") to farm in on 11% of the Llancanelo heavy oil
field as previously announced in the press release on November 13, 2017. This agreement which is
subject to standard regulatory approval takes PentaNova to a 50%
working interest partnership in the field and is the result of a
successful strategy to consolidate the position in the field by
acquiring interest from three different parties.
The Llancanelo area is located to the north of the Neuquén
Basin, in a basin-edge position in the province of Mendoza, 37 km
southeast of the city of Malargüe. It is located between the main
producing areas of the Neuquén basin and the 106,000 bbls/day
processing capacity Lujan de Cuyo
refinery, which is immediately south of Mendoza city. The field is
close to existing road, pipeline and airport infrastructure.
The Llancanelo field was discovered by YPF in 1937 after
drilling two exploratory wells that tested oil in the Tertiary
levels. In the 1980's Union oil completed a successful steam
injection pilot program before abandoning the efforts due to low
oil prices. The fields potential was first fully recognized when
horizontal wells were shown to be more productive, and provided the
current profile of cold flowing, very low water cut 11-14 api crude
that is the hallmark of Llancanelo today. In 2016, a development
campaign of horizontal wells were drilled into the large heavy oil
body. YPF entered a phase of evaluation and planning after drilling
these wells, and during the month of September 1277 boepd conventional cold flow
horizontal wells.
"Acquiring our full 50% working interest in the Llancanelo field
positions PentaNova to begin a partnership with YPF to rapidly
develop this asset is an important step in PentaNova becoming a
major oil producer." said PentaNova Chairman and Executive Director
Serafino Iacono. "By working with
our partners YPF, we plan to take this field — already producing
1300 bbls/day — to its full potential and make Llancanelo the
cornerstone of a heavy oil strategy in Argentina."
The acquisition of Llancanelo will see PentaNova pay a
$3 million deposit ($0.5 million already paid), fund a $54 million development work program over 3 years
and conditionally pay a $10 million
payment on the third anniversary of the agreement. Beyond
this work program, the partners will carry their proportional
share of investment into the block. The farm in terms provide
rights to PentaNova over the surrounding Llancanelo R block, the
detailed terms and conditions of will be finalized in the coming
months with YPF.
PentaNova and YPF have entered into an agreement where a
comprehensive evaluation of the optimal development techniques
based on the work that YPF has completed will be undertaken over
the coming months to plan a development drilling campaign to be
initiated in mid-2018. In the interim, the field has seen the
recent application of a downhole heater, and a coil tubing unit is
being mobilized in the coming weeks to complete a workover and
cleanout campaign to improve production from the existing
wells.
PentaNova management team and the technical team assigned to the
Llancanelo project have extensive experience in developing and
rapidly scaling up production in heavy oil assets in which include
Canada, Venezuela, Colombia and Argentina.
About PentaNova Energy Corp.
PentaNova Energy Corp. is a publicly traded E&P company
focused on proven oil & gas plays in Latin America. The Company holds a large
diversified portfolio of producing, development and unexploited
assets in Colombia and
Argentina, where it will leverage
its amplitude of technical expertise and proven track record
building companies and creating value.
Forward-Looking Information
Except for the statements of historical fact, this news
release contains "forward-looking information" within the meaning
of the applicable Canadian securities legislation that is based on
expectations, estimates and projections as at the date of this news
release. The information in this news release about the
completion of the operations described herein, and other
forward-looking information includes but is not limited to
information concerning the intentions, plans and future actions of
the parties to the transactions described herein and the terms of
such transaction.
Factors that could cause actual results to differ materially
from those described in such forward-looking information include,
but are not limited to, risks related to the Company's inability to
perform the proposed operations.
The forward-looking information in this news release reflects
the current expectations, assumptions and/or beliefs of the Company
based on information currently available to the Company. In
connection with the forward-looking information contained in this
news release, the Company has made assumptions about the Company's
ability to complete the planned operations and activities. The
Company has also assumed that no significant events will occur
outside of the Company's normal course of business. Although the
Company believes that the assumptions inherent in the
forward-looking information are reasonable, forward-looking
information is not a guarantee of future performance and
accordingly undue reliance should not be put on such information
due to the inherent uncertainty therein.
Any forward-looking information speaks only as of the date on
which it is made and, except as may be required by applicable
securities laws, the Company disclaims any intent or obligation to
update any forward-looking information, whether as a result of new
information, future events or results or otherwise.
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SOURCE PentaNova Energy Corp.