Vega Grande Highlights:
- Option to acquire a 50% interest in a producing oil field;
- Andes Energia has paid an initial amount of US$1.3m in cash to secure; the option, which will be refunded if the option is not exercised;
- A further payment of US$9.2m will be payable in cash upon exercise of the option with possible further consideration payable in Andes Energia shares depending on the level of reserves discovered;
- If exercised, this will be Andes Energia's first producing oil field and will extend its oil and gas assets into the Mendoza province;
- If exercised, the final owners will be Andes Energia 50%, Petro Saudi Inc. 24% and Grecoil y Cia SRL 26%;
- Exercise of the option may constitute a related party transaction.
Corralera & Mata Mora Highlights:
- Option to acquire a 20% participation in two license blocks;
- US$480,000 payable in cash upon exercise of the option;
- Investment commitment of Andes Energia expected to be approximately US$1.2 million over 3 years;
- Corralera has a discovery well, NQ PB X-3;
- If exercised, the final owners will be Andes Energia 20%, Ketsal S.A 18% and Kilwer S.A. 62%.
Since re-admission to AiM in October, Andes Energia has acquired a controlling interest in Hidroelectrica Ameghino S.A, a hydro power plant. The Company has also recently extended its option to acquire the remaining 50% of SODEMSA, which has a 51% controlling interest in EDEMSA, the main electricity distribution company in the province of Mendoza.
Commenting on the signing of these options, Chief Executive Officer Luis Alvarez Poli said: "We are delighted with the fact that we have been able to identify opportunities to grow our asset base at such a pace, in line with our stated business strategy. Vega Grande will give us existing production in an under-managed and under-exploited field, whilst Corralera & Mata will give us the opportunity to enter the Neuquen province in blocks with tested production."
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