Petrominerales Adds Additional Interest in Peru

Petrominerales, a 66% owned subsidiary of Petrobank and Veraz, announced that Petrominerales has agreed to acquire an additional 25% interest from Veraz in Block 126 in east central Peru.

Under the terms of the agreement, Petrominerales will pay consideration to Veraz including a cash payment and carry for expenditures incurred through the upcoming drilling program on Block 126 totaling USD $6.75 million. Additionally, a bonus of up to USD $8.0 million is payable based on reaching certain aggregate production levels on Block 126. Lastly, Petrominerales has granted Veraz a 20% working interest in Block 161 in the Ucayali Basin and Block 141 in the Titicaca Basin.

Blocks 141 and 161 were acquired by Petrominerales through its acquisition of Pan Andean Resources plc in April 2010.

Block 141, situated in southern Peru, is 1.3 million acres in size and is currently held 100% by Petrominerales. The Pirin field, situated on trend to the southeast of Block 141, produced approximately 300,000 bbls of light (36 degree API) oil between 1875 and 1915, but little work has been done since. Current commitments, to be completed by May 2011, include the acquisition, processing and interpretation of 300 kilometers of 2D seismic.

Block 161, situated in east central Peru, is 1.2 million acres in size and is currently held 100% by Petrominerales. Current commitments, to be completed by June 2012, include the acquisition of 350 kilometers of new 2D seismic data and an updated geological and geophysical report incorporating existing geological data and reprocessed seismic.

Mr. Oppe Cosijn, President and CEO of Veraz, stated, "this is a pivotal transaction for Veraz. The Corporation has expanded its opportunity base in Peru to include two additional blocks and further strengthened its relationship with Petrominerales, one of the premier E&P companies in South America."

The Companies have finalized the drilling locations for Block 126. Initial infrastructure and road work will proceed shortly with drilling planned for the second quarter of 2011.


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