The board of Black Rock Oil has conditionally agreed the terms of new funding to develop further the company's interests in Colombia. Pursuant to the financing, Prospero Hydrocarbons Inc, a private Canadian based oil exploration and development company, has agreed to invest U.S. $1,439,015 for an equity interest of up to 49% in the company's interests in and the Alhucema E&P Contract in the Middle Magdalena Valley of Colombia. In addition, the company and Prospero have signed binding heads of terms under which Prospero has agreed to invest up to U.S. $4 million in relation to the Las Quinchas Association Contract.
The Board is excited about the prospects for the Alhucema E&P Contract and the Las Quinchas Association Contract and has explored the options for securing the funding required for its continued participation, including a further equity issue by the company, a farm-in or strategic investment. The directors believe that the proposed investment by Prospero is in the best interests of the company and should enable the company to develop its Colombian interests over the course of the next year. In addition, the directors believe that the company will benefit from Prospero management's extensive South American heavy oil experience.
Closing of the financing is expected to occur on or before March 4, 2008 and while there can be no certainty at this stage, the Board believes that there is a reasonable likelihood that the financing will be concluded in the time frame envisaged. A further announcement will be made in due course.
"We are delighted to have agreed this deal with Prospero," Dr John Cubitt, managing director of Black Rock, commented. "Not only does it provide sufficient funds to enable us to meet our anticipated 2008 funding obligations, but it also brings in a partner with significant heavy oil experience. I believe this deal will allow us to make real progress with our Colombian assets."
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