Heavy Earth Resources, Inc., an oil and gas exploration and production company focused on Central and South America, today announced that it entered into a non-binding letter of intent (“LOI”) through its wholly owned subsidiary Deep Core Barbados, with New Horizon Exploration, Inc., an oil and gas exploration and production company based in the United States with principal operations in Colombia, for the purchase of 100 percent of the equity ownership of New Horizon.
“We are very excited to have entered into this letter of intent and are anticipating closing this transaction by January 31, 2014. Together with our partners, we hope to be able to more rapidly expand the pace of the exploration of this very promising block”
Heavy Earth currently owns a 25 percent working interest in the 68,302 acre La Maye Block in the Lower Magdalena Basin in Colombia. New Horizon is currently the operator of the La Maye Block. As part of the proposed transaction contemplated under the LOI, the Company will assume operatorship of the La Maye Block from New Horizon, while increasing its working interest in the La Maye Block to 38 percent.
The La Maye Block is immediately updip of the producing Cicuco and Boquete fields, and contains several seismically defined prospects, the largest of which has a significant amount of unrisked resources. With the purchase of New Horizon, the Company will be able to focus on its La Maye Block asset while retaining a significant interest in the Morichito Block. The Company believes that with the new structure, the exploration of the La Maye Block should proceed at a quicker pace.
“We are very excited to have entered into this letter of intent and are anticipating closing this transaction by January 31, 2014. Together with our partners, we hope to be able to more rapidly expand the pace of the exploration of this very promising block,” said Anthony Ives, Chief Financial Officer of Heavy Earth. The Company is currently in the process of raising capital to drill the La Maye Block.
This proposed transaction remains subject to subject to a number of conditions, including due diligence, negotiation and execution of a definitive agreement and customary regulatory approvals. While the Company expects to close this transaction by Jan. 31, 2014, there can be no assurance that due diligence will be satisfactory, that regulatory approvals will be received, that a definitive agreement will be entered into or that this transaction will be consummated as proposed or at all.
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