Petro Vista Energy Corp., an independent oil and gas exploration company, announced that it has entered into a Heads of Agreement with New Horizon Exploration Inc. to farm-in to a 25% working interest in the La Maye oil and gas exploration block located in the Lower Magdalena Basin, Colombia.
The La Maye Block consisting of 68,473 acres (27,710 gross hectares) and is located within the Lower Magdalena Valley, Colombia, which adjoins the Cicuco Oil Field that has produced over 44.69 million barrels of oil and 181.14 billion cubic feet of gas through June 2000 from 28 wells. Initial production rates from the area ranged from 600 - 4,000 barrels of oil per day. As of March 2008, the Cicuco was producing an average of 293.3 barrels of oil per day. The Agencia Nacional de Hidrocarburos ("ANH") has reported cumulative production for the Cicuco Oil Field from January 2005 to March 2008 to be 301,867 barrels of oil.
Within a ten-mile radius, the Cicuco Oil Field also neighbors the producing Boquete, Zenon and Boquila oil fields. The La Maye Block, along trend with the Cicuco Oil Field, is adjacent to and south of the Occidental, Repsol and Ecopetrol Lucia Block. Oil from the Cicuco Oil Field is light sweet crude at 43 to 55 degree API.
Phase 1 of the E&P Contract is 12 months in duration and consists of the reprocessing of 138 km of existing seismic data and the drilling of one exploration well to a minimum total depth of 5,000 feet. The reprocessing has already been completed with significantly improved results. Phases 2 through 6 of the E&P Contract are 12 months each in duration and consist of the drilling of one 5,000 foot total depth exploration well per phase. The current plan for La Maye is to drill up to four wells as part of the farm-in agreement. Up to five independent prospects have already been identified. The first well will spud by mid October. Depending on results of this first well 3D seismic data would be acquired prior to drilling the next or a continuation of the drilling program to confirm the discovered resources if any and/or explore additional prospects. Should more than one well be drilled in the first 12-month period an application to the ANH will be made to include these wells for a reduction in the subsequent years commitments.
Pursuant to the terms of the Heads of Agreement (the "Agreement") with New Horizon Exploration Inc. (the "Operator") Petro Vista will (subject to regulatory approval) acquire a 25% working interest in the La Maye Block (the "Block"), which has an Exploration and Production Contract ("E&P Contract") with the Agencia Nacional de Hidrocarburos (the "ANH"). The Agreement requires Petro Vista to assume 25% of the costs of a turn-key contract to drill four (4) wells in the Block at a net cost to Petro Vista of US$2,050,000. The Agreement will be superseded by a Joint Operators Agreement and a Participation Agreement.
The completion of this acquisition is subject to Petro Vista receiving TSX Venture Exchange acceptance and the ANH's approval to the assignment to Petro Vista of the 25% interest in the Block.
President and CEO of Petro Vista, Read B. Taylor stated, "The La Maye Block is a significant opportunity for us. La Maye is the second Petro Vista asset strategically acquired in Colombia as part of our plan to put together a balanced mix of low risk near term production opportunities similar to Morichito along with selected assets having 2008-2009 drilling opportunities for significant impact or exploration upside potential. We are excited about this acquisition as it offers Petro Vista an opportunity to explore for significant oil reserves by the end of the year at low cost."
Steven Benedetti, Vice President of South America Petro Vista, says, "The La Maye Block is a significant project that we expect to develop in Colombia this year. Colombia is known to encompass one of the best hydrocarbon resource potentials in the world. With the success of nearby producing fields, as well as the Cicuco field that the La Maye Block lies adjacent to believe our positioning is favorable."
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