Vinccler Receives US$7.4mn Refund for Gas Block

Vinccler Oil and Gas, the Venezuelan unit of Canadian oil company PetroFalcon (TSX: PFC), has received a full refund of the US$7.39mn bid bond it paid to the energy and oil ministry for an exploration license on the Castilletes Noreste 2 block, Vinccler CFO Clancy Cottman told BNamericas.

The block was awarded to Vinccler as one of three offshore blocks in the Rafael Urdaneta phase B offshore lease sale in the Gulf of Venezuela last November.

However, Vinccler signed an agreement with the energy and oil ministry in early February not to seek damages resulting from the postponement of exploration on the block.

"The agreement says that when the block becomes available, we have the first option at a price equivalent to what we paid plus interest for inflation," Cottman said.

Vinccler is still very much interested in Castilletes, Cottman added.

"We are very keen on that block, we like it. It's near [to other Vinccler operations in western Venezuela's Falcon state]. We think it's very prospective."

Cottman could not confirm statements by other Vinccler officials regarding the possibility of commercial amounts of crude being present in Castilletes. The official also declined to disclose the reason the energy and oil ministry offered for deciding not to give Vinccler the go ahead.

Vinccler is partners with state oil firm PDVSA in two blocks. The joint venture currently produces some 1,400 barrels a day of light crude and 6 million cubic feet of natural gas that are sold to PDVSA at a rate of US$1.33 per thousand cubic feet. Vinccler hopes to triple production of both crude and gas by end-2006.

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