VANCOUVER, June 21, 2018 /CNW/ - PentaNova Energy Corp.
(the "Company" or "PentaNova") (TSXV: PNO), is
pleased to announce the signing of the SN-9 Farm Out Agreement (the
"Agreement") with Panacol Oil & Gas ("Panacol"),
a wholly owned subsidiary of LATAM Oil & Gas. Under the terms
of the Agreement, Panacol will fully fund the Company's commitments
during the first phase of the SN-9 Exploration and Production
Contract for the amount of US$22.29
million, which will give Panacol the right to earn up to a
40% economic beneficial interest in the SN-9 Block from the
Company's 80% economic beneficial interest. Assignment of working
interests for both parties is subject to approval from the National
Hydrocarbon Agency of Colombia.
The Agreement is expected to close within the next 30 days during
which time Panacol will be required to place US$3.0 million in escrow to fund near-term
activities. In addition, Panacol is required to provide a standby
letter of credit for US$3.0 million
to guarantee further payments into the escrow account and pay
approximately US$650,000 in past
costs. Under the terms of the Agreement, Panacol will recover 50%
of the funds invested from 70% of the proceeds of the Company's net
production.
Ralph Gillcrist, President and
CEO, commented:
"The SN-9 block has all the hallmarks of being an exceptional
core asset for PentaNova being adjacent to the prolific Canacol
Energy Ltd. ("Canacol") gas producing assets. By entering
into this Agreement with Panacol, PentaNova is in a position to
execute the exploration program required to confirm the gas
potential of the block. We look forward to leveraging the abundant
experience of the Panacol team to complement the PentaNova team and
accelerating our operational activities."
SN-9 Block
The 313,638 acre SN-9 block is located in the northern province
of Cordoba, in the Lower Magdalena Basin of Colombia directly adjacent to, and west of,
the major gas producing area operated by Canacol. Canacol produces
88% of its 106 million cubic feet per day ("MMscfd") gas
production from this area and reported aggressive expansion plans
in their Q1 2018 investor update on May 16,
2018, reflected in their 1Q 2018 Conference Call Transcript
published on the Canacol website (www.Canacolenergy.com). PentaNova
believes that the gas play being developed by Canacol extends into
the south eastern portion of the SN-9 block. The SN-9 block has
over 736 km of 2D seismic lines and one discovery well, Hechizo-1,
drilled in 1992 that tested a combined rate of 10.3 MMscfd,
confirming the likely extension of the gas play from Canacol's area
into SN-9. Given the proximity to the gas infrastructure that
supplies the north of Colombia,
the south eastern structures of the SN-9 block will be the focus of
immediate activities for the Company.
SN-9 Future Planned Activities
The Company anticipates completing the prior consultation
process required to acquire seismic in the block by the end of
June 2018 and plans to issue tenders
for the acquisition of 140km2 of 3D seismic, and related
services, over the next two weeks. The Company expects to acquire
the 3D seismic in October and November of 2018.
The prior consultation and permitting process required for
drilling on the block is expected to start in July 2018, as soon as the prior consultation for
seismic is complete. On completion of this process, anticipated for
mid 2019, civil works will be initiated with a view to spudding the
first exploration well midyear 2019.
About PentaNova
PentaNova is investing in proven leadership and technology to
develop oil and natural gas fields it has acquired in areas
surrounding some of the key energy producing areas in Colombia and Argentina. With decades of proven experience
in Latin America and global energy
development, PentaNova's leadership is working with local partners
and service providers, including YPF, Argentina's respected energy producer, to
deliver the energy for Latin
America's future.
Forward-Looking Information
This news release contains "forward-looking statements" and
"forward-looking information" (collectively referred to herein as
"forward-looking statements") within the meaning of applicable
securities legislation. Such forward-looking statements include,
without limitation, forecasts, estimates, expectations and
objectives for future operations that are subject to a number of
material factors, assumptions, risks and uncertainties, many of
which are beyond the control of the Company.
Forward-looking statements are statements that are not
historical facts and are generally, but not always, identified by
the words "expects", "plans", "anticipates", "believes", "intends",
"estimates", "continues", "projects", "forecasts", "potential",
"budget" and similar expressions, or are events or conditions that
"will", "would", "may", "could" or "should" occur or be achieved.
This news release contains forward-looking statements, pertaining
to, among other things, the following: Panacol's funding of the
Company's commitments during the first phase of the SN-9
Exploration and Production Contract for the full amount of
US$22.29 milllion, the expected
closing date for the Agreement, Panacol's recovery of the Company's
share of the investment from 70% of the proceeds of the Company's
net production, the quality of the SN-9 block as an exceptional
core asset for the Company, the Company's ability to execute the
exploration program required to confirm the gas potential of the
SN-9 block, the Company's leveraging of the experience of the
Panacol team to complement its own team, the Company's plans to
accelerate its operation activities, the extension of the gas play
from Canacol's gas producing area adjacent to the SN-9 block into
the SN-9 block, the Company's intention to focus on the south
eastern structures of the SN-9 block in the immediate term, the
Company's completion of the prior consultation process required to
acquire seismic in the SN-9 block by the end of June 2018 and plans to issue tenders for the
acquisition of 140km2 of 3D seismic, and related
services, over the next two weeks, the Company's expectations
regarding the timing of receipt of such 3D seismic data, the
Company's intention to start the prior consultation and permitting
process required for drilling on the SN-9 block in July 2018 and the timing thereof, the Company's
plans regarding the initiation of civil works and the timing
thereof, and the Company's plans regarding the timing for the
spudding of the first exploration well on the SN-9 block.
Although the Company believes that the material factors,
expectations and assumptions expressed in such forward-looking
statements are reasonable based on information available to it on
the date such statements are made, undue reliance should not be
placed on the forward-looking statements because the Company can
give no assurances that such statements and information will prove
to be correct and such statements are not guarantees of future
performance. Since forward-looking statements address future events
and conditions, by their very nature they involve inherent risks
and uncertainties.
Actual performance and results could differ materially from
those currently anticipated due to a number of factors and risks.
These include, but are not limited to: known and unknown risks,
including those set forth in the Company's Management's Discussion
and Analysis for the year ended December 31,
2017 (a copy of which can be found under PentaNova's profile
on SEDAR at www.sedar.com); the risks associated with the oil and
gas sector, including current and expected oil and natural gas
prices; exploration and development costs and delays; reserves
discovery and decline rates; pipeline and transportation capacity;
weather, health, safety and environmental risks; integration of
acquisitions, competition, and uncertainties resulting from
potential delays or changes in plans with respect to acquisitions,
development projects or capital expenditures and changes in
legislation including, but not limited to, tax laws, royalties,
incentive programs and environmental regulations; stock market
volatility and the inability to access sufficient capital from
external and internal sources; operations in foreign jurisdictions;
general economic, market or business conditions; global economic
events; changes to PentaNova's financial position and cash flow;
the availability of qualified personnel, management or other key
inputs; currency exchange fluctuations; changes in political and
security stability; risks and uncertainty related to distribution
and pipeline constraints; and other unforeseen conditions which
could impact the Company. Accordingly, readers should not place
undue importance or reliance on the forward-looking statements.
Readers are cautioned that the foregoing list of factors is not
exhaustive.
Statements, including forward-looking statements, contained
in this news release are made as of the date they are given and the
Company disclaims any intention or obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, unless so required by
applicable securities laws. The forward-looking statements
contained in this news release are expressly qualified by this
cautionary statement.
Additional information on these and other factors that could
affect the Company's operations and financial results are included
in reports on file with applicable securities regulatory
authorities and may be accessed under PentaNova's profile on SEDAR
at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE PentaNova Energy Corp.