Norway's InterOil E&P announced Friday that its affiliate InterOil Colombia E&P has entered into a binding memorandum of understanding with Pangea Energy Corporation in respect of a 50-percent farm-out of the COR-6 block and a 40-percent farm-out of the Altair block, both in Colombia.
InterOil is currently the operator of both blocks and owns 100 percent and 90 percent of the working interest on COR-6 and the Altair blocks respectively.
Pangea Energy has agreed to cover $17.2 million of the total work commitment of $22 million in Phase 1 of the COR-6 contract.
In addition, Pangea Energy will pay a signing fee of $3 million and cover $7.2 million of the remaining work commitment totalling $12 million on the Altair block. These farm-out agreements are subject to ANH approval.
"Pangea is a very interesting company with an innovative view for both these blocks. We welcome the possibility to work with Pangea in the future," said InterOil Chairman Mårten Rød.
Pangea Energy Chief Executive Officer Quinton Rafuse of Pangea Energy added: "This farm-in represents a strategic entry into the Colombian market for Pangea. In Interoil, Pangea finds a well-established operator and two key assets blending near-term cash flow and impactful exploration potential. We are excited to work with Interoil and develop a long-term relationship."
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