Vast Exploration has closed its previously announced farm-out of a 90% interest in the Putumayo Basin of Colombia Block (the "Block") to a wholly-owned subsidiary of Sagres Energy Inc. ("Sagres") in consideration for the Company retaining a 10% carried interest during the first exploration phase (the "Carried Interest").
The Block has an area of 148,000 acres (gross) and is located in the Putumayo Basin of Colombia. The Block offers exploration upside on a structural trend with existing discoveries, and is situated strategically between two blocks (CAG-6 and PUT-09) awarded to Pacific Rubiales and Talisman Energy, respectively. The Block carries a royalty of 7% payable to the Government of Colombia in addition to the basic royalty scheme established under Colombia Law, being 8% for up to 5,000 bopd and increasing to 25% for a 600,000 bopd field. All other terms of the contract are standard to the model Colombian E&P Contract. Sagres will have an option to acquire the Company's Carried Interest in the Block over the next twelve months at a price to be mutually agreed.
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