BOGOTA, Colombia, Sept. 4, 2012 /PRNewswire/ -- La Cortez
Energy, Inc. ("La Cortez" or the "Company") (OTC: LCTZ)
announced the transfer of its private rights and obligations under
the Joint Operating Agreement covering the Putumayo-4 Block (the
"Putumayo-4 JOA") to Petroleos del Norte
S.A. ("Petronorte"), a subsidiary of PetroLatina Energy
Limited. Petronorte is the operator of the Putumayo-4 block and the
other party to the Putumayo-4 JOA.
Pursuant to the terms of the transaction, La Cortez Energy
Colombia, Inc., a subsidiary of La Cortez and a private party to
the Putumayo-4 JOA, transferred its 50% participation right in the
joint venture to Petronorte and received cash in the amount of
$4.1 million. The cash proceeds
represent payments previously made by La Cortez to Petronorte under
the Putumayo-4 JOA plus the release of $2.67
million in restricted cash (plus interest) held to support a
portion of Petronorte's guarantee in favor of the Agencia Nacional
de Hidrocarburos (the "ANH").
In anticipation of the transfer of its interest in Putumayo-4,
La Cortez implemented a corporate reorganization that the Company
believes will significantly reduce future administrative overheads.
Employee headcount has been reduced, and, effective August 1, 2012, managerial oversight of the
Company's operations was transferred to Upside Energy & Mining
Services ("Upside"), a company in the business of providing
consulting and project development services in the energy and
mining sectors. Upside is based in Bogota, Colombia (www.upside-ems.com), and its
staff, which includes Jose Fernando
Montoya, currently a member of the Board of Directors of La
Cortez, is experienced in all aspects of the oil and gas industry
in Colombia. The Company pays Upside a monthly fee for the
services rendered, which the Company expects will be
significantly lower than prior administrative expenses. Upside is
familiar with the operations of La Cortez, which is expected to
provide continuity of operations. In addition, the Company
has elected not to renew its office lease in Bogota effective September 1, 2012, and will utilize the
facilities of Upside to conduct its operations in the future.
Subsequent to the resignation of Andres
Gutierrez on July 31, 2012 as
the CEO and President of La Cortez, Nadine
C. Smith was appointed President of La Cortez.
She continues to serve as Chairman and interim Chief
Financial Officer of La Cortez.
Further, on June 29, 2012, La
Cortez filed a Form 15 with the Securities and Exchange Commission
(the "SEC"), which initiated a process of deregistration of the
Company's shares under the U.S. Securities Exchange Act of
1934. Upon filing, the Company's obligations to file periodic
reports with the SEC (that is, Forms 10-K, 10-Q and 8-K)
ceased. The deregistration will be effective, if not delayed
by the SEC, ninety days subsequent to the date of filing of the
Form 15 (or September 27,
2012). As a result of this deregistration, La Cortez will
cease to be a reporting company with the SEC, and future audit,
accounting and legal expenses should be significantly reduced from
historical levels.
Proceeds from the Putumayo-4 transaction will be used, in part,
to fund La Cortez's share of the costs of the previously announced
Agapanto-1 well that is currently drilling on the Maranta block.
The 2013 work program for Maranta and the determination of whether
to enter into a second phase of commitment under the terms of the
exploration license covering the Maranta block is expected
subsequent to evaluation of the drilling results of Agapanto-1.
If the Company decides to enter into a subsequent Phase 2
additional exploration commitment (an option under the
current form of agreement), the parties will be required either to
acquire 120 km of 2D seismic or drill a well. The second phase of
the exploration license covering the Maranta block, if extended,
expires August, 2014.
Nadine C. Smith, President of La
Cortez commented on the Company's recent activities:
"Our strategic objectives going forward will focus on maximizing
cash flow from operating activity and continued development of our
interest in the Maranta block. Together with our partner Vetra
Exploracion y Produccion Colombia S.A., we will also be actively
engaged with Ecopetrol in negotiating the terms of a restructuring
of the contract covering the two fields we operate through Avante
Colombia in the Catatumbo.
"The transfer of our interest in Putumayo-4 has generated
significant cash for La Cortez that will be redeployed into our
primary producing assets on the Maranta block. The transfer
also eliminates significant capital obligations over the next
twelve months for the seismic acquisition and drilling work
commitments required in connection with the terms of the Putumayo-4
exploration license. Taking into account expected cost
savings from the corporate restructuring and reduced legal and
accounting expenses as a consequence of deregistration, La Cortez
anticipates cash on hand, together with cash flow from operations,
will be sufficient to fund the Company's contractual obligations
through year-end 2013 Taking the above steps to reduce
expenses significantly improves the Company's financial position
while capital markets remain challenging. We believe the
transaction also makes the Company a more attractive candidate for
a potential corporate transaction in the 2012-2013 timeframe."
La Cortez Energy, Inc.
La Cortez Energy, Inc. is a development stage oil and gas
exploration and production company currently pursuing a business
strategy in the energy sector in South
America, with an initial focus on identifying oil and gas
exploration and production opportunities in Colombia. To that end, the company has
established a headquarters office in Bogota, Colombia, and has entered into several
joint venture agreements. These agreements include a joint venture
involving a 20% working interest in the Maranta block. The Maranta
block is located in the prolific Putumayo Basin in Southwestern Colombia. Assignment of the
working interest agreement in the Maranta block is subject to the
approval of the ANH. The assignment of the participation interest
in the Maranta block is subject to the approval of the Colombian
Hydrocarbon Agency - Agencia Nacional de Hidrocarburos (ANH).
In early 2010, La Cortez acquired the 100% interests of Avante
Colombia, Inc. in the Rio de Oro and the Puerto Barco fields
located in the Catatumbo Basin in Northeastern Colombia. Avante Colombia
currently has a 50% participation interest in, and is the operator
of, the Rio de Oro and Puerto Barco production contracts with
Ecopetrol S.A.
The Company's joint venture agreements have been signed with
experienced, established producers in Colombia, including Sinochem (Emerald Energy
PLC – Sucursal Colombia) and Vetra Exploracion y Produccion
Colombia, S.A. The company is currently producing from both of its
two initial exploration wells in the Maranta Block.
For more information, please contact the Company's Investor
Relations department at 941-870-5433 or by email at
info@lacortezenergy.com.
http://www.lacortezenergy.com/
Forward-Looking Statements Disclaimer
Certain statements in this news release are forward-looking
statements. These statements are subject to risks and
uncertainties. Words such as "expects", "intends", "plans",
"may", "should", "anticipates", "potential", "believes" and words
of similar import also identify forward-looking statements.
Forward-looking statements are based on current facts and analyses
and other information and assumptions of management. Actual results
may differ materially from those currently anticipated due to a
number of factors beyond the reasonable control of the Company,
including, but not limited to, the Company's ability to minimize
its administrative costs through 2013, maximize cash flow out of
the operations of the Maranta Block, successfully negotiate with
Ecopetrol regarding our two blocks in the Catatumbo region and
successfully find and negotiate a corporate transaction in
2012--2013.
SOURCE La Cortez Energy, Inc.
