Taghmen Energy Acquires Petroleoes del Norte S.A.
Taghmen Energy has concluded an agreement to acquire Petroleos del Norte S.A. ("PDN").
PDN is a Colombian company that:
- operates three fields in the Middle Magdalena Valley in Colombia, which produce 977 barrels of oil per day ("bopd"), 523 bopd net,
- has proven and probable reserves of 6.9 million barrels (net to its interests),
- holds three additional exploration (technical evaluation) licenses in Colombia,
- owns and operates the Rio Zulia - Ayucucho Pipeline, which generated US$1.00 million in tariff income in 2005,
- generated approximately US$ 3.08 million in operating cash flow in 2005, and
- has a high quality local operating team in place.
Rationale and Strategy:
- Complements Taghmen's existing acreage in the Middle Magdalena Valley in Colombia; PDN's fields are situated alongside Taghmen's interests in the Midas and La Paloma Blocks.
- Provides significant upside potential from existing oil fields and complementary exploration prospects.
- Increases the drilling and work over program scheduled over the next twenty four months to 14 wells, between Guatemala and Colombia.
- Gives Taghmen immediate infrastructure and a pipeline to exploit its license interests in Midas and La Paloma.
- Gives Taghmen a second core business in Latin America alongside its Guatemala operations.
Nicholas Gay, Chief Executive Officer, commented:
"This is a key acquisition for Taghmen giving us immediate production and infrastructure in Colombia which both complements our existing asset base there and gives us a launch pad to create a sizeable business. Following the acquisition, the Group will be well positioned in Latin America with core businesses in Colombia and Guatemala that have the potential to produce around 3,500 bopd by the end of 2007."
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