Vintage Petroleum Acquires Acreage in San Jorge Basin

San Jorge Basin, Argentina
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Vintage Petroleum has signed an agreement to acquire producing properties in the San Jorge basin of Argentina for $36.4 million cash net of working capital as of the transaction's April 1, 2004, effective date. The agreement calls for Vintage to acquire 100 percent of the wholly-owned Argentine subsidiary of Rio Alto Resources International, Inc. (Calgary, Alberta) whose principal asset is an operated producing concession which covers approximately 54,000 acres in the north flank of the basin. The transaction is anticipated to close on August 13, 2004, subject to approval of Rio Alto's shareholders and normal due diligence.

Current net production attributable to the producing Bella Vista Oeste concession is estimated at 1,900 barrels of oil and natural gas liquids per day from approximately 50 active producing wells. Vintage believes the properties contain significant workover, drilling and waterflood potential which it plans to pursue along with the implementation of operational efficiencies.

"These properties provide us with an initial entrance into the north flank of the San Jorge Basin, complementing our existing acreage position in excess of over one million acres in the southern portion of the basin. The acquired properties are a logical extension to our existing property base and contain similar geology and well established, predictable production decline curves. These properties also provide Vintage with the type of operational and work program opportunities in which we have excelled historically," said Charles Stephenson, CEO. "In anticipation of this transaction, we added oil price hedges covering approximately 1,400 barrels of oil per day through the first quarter of 2007 at monthly NYMEX reference prices ranging from $41.46 to $31.31 per barrel to assist in protecting acquisition returns."

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