West Falcon Unit
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PetroFalcon's subsidiary, Vinccler Oil and Gas, C.A., has completed the acquisition of a subsidiary from Samson International. The Company now owns West Falcon Samson Hydrocarbons, S.R.L. which owns 100% of the West Falcon Operating Service Agreement in Venezuela (the "West Falcon Unit"). The effective date of the acquisition is October 1, 2005, and the purchase price consisted of US$ 2 million cash and 1.75 million common shares of PetroFalcon Corporation. The parties have received approval from the Venezuelan Ministry of Energy and Petroleum ("MENPET") for the acquisition. The current production from the West Falcon Unit is approximately 450 barrels of oil equivalent. The production is delivered into PDVSA's oil and gas pipelines which serve the Paraguana Refining Complex, the world's largest refinery. The West Falcon Unit covers a large portion of the western part of Falcon State immediately adjacent to Vinccler's East Falcon Unit. The West Falcon Unit also contains exploration and exploitation projects which include shut in oil and gas fields and seismically defined high potential drilling targets located near the pipeline transport system. The Company plans to test the shut in wells and begin the permitting process for at least one 4500 foot exploration well in 2006.
The acquisition of West Falcon Unit raises the Company's daily production to over 1,600 barrels of oil equivalent (boe).
Vinccler anticipates that the assets of this new subsidiary will form an integral part of the Empresa Mixta currently being negotiated with MENPET and Corporacion Venezolana de Petroleo ("CVP"). The combined assets will solidify the Company's position in the State of Falcon and allow Vinccler to grow its oil and gas production.
Juan Francisco Clerico, Chairman and CEO of the Company stated, "This acquisition is consistent with our commitment to expand our Venezuelan operations and grow our oil and gas production in the western part of the country. We look forward to working with the Ministry of Energy and Petroleum and PDVSA to expand activity in the State of Falcon."
PetroFalcon Corporation is a natural resource company currently engaged in oil and gas operations in Venezuela through its wholly-owned subsidiary, Vinccler Oil and Gas, C.A. The common shares of the Company trade on the Toronto Stock Exchange with the symbol "PFC".