Petro Vista Energy Corp. announced the completion of the acquisition of a 25% working interest in the La Maye Block located in the Lower Magdalena Basin, Colombia.
The Company acquired a 25% working interest in the La Maye Block, Lower Magdalena Basin, Colombia from New Horizon Exploration Inc. in exchange for cash consideration of US$2,062,500 of which an initial tranche of US$916,958 is payable within four business days with the balance payable upon the completion of the assignment of the Company's 25% working interest. The consideration represents 25% of the cost of a turn-key contract to drill four (4) wells in the Block.
The La Maye Block was granted to New Horizon in April 2008 pursuant to an Exploration and Production Agreement ("E&P Contract") signed with the Agencia National de Petroleo (the "ANH"). The Block consists of 68,473 acres (27,710 hectares) and is located within the Lower Magdalena Basin, Colombia, approximately 15 kilometers and up-dip from the producing Cicuco Oil Field. As of March 2008, the Cicuco Oil Field was producing an average of 293.3 barrels of oil per day per well. The ANH has reported cumulative production for the Cicuco Oil Field from January 2005 to March 2008 to be 301,867 barrels of oil. Oil from the Cicuco Oil Field is light sweet crude at 43 to 55 degree API (independent source: Petrotech Engineering Ltd. (2008 May) "Evaluation of the Interests of Petro Vista Energy in the La Maye Block Lower Magdalena Valley, Onshore Colombia"). The Cicuco Oil Field neighbors the producing Boquete, Zenon and Boquila oil discoveries, all lying within a ten-mile radius of the Cicuco Field. The La Maye Block, along trend with the Cicuco Oil Field, is adjacent to and south of the Occidental Petroleum, Repsol S.A. and Ecopetrol Lucia Block.
The Phase 1 Minimum Exploration Program mandated by 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 been completed with important 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 Company and New Horizon intend to accelerate exploration on the La Maye Block and intend to drill up to four wells within the next 9 months. Up to five independent prospects have already been identified within the block. The first well is planned to Spud by mid October. It is the Company and New Horizons plan to drill an additional three wells on the identified prospects, in which case an application to the ANH will be made to include these wells as part of the work program, such that a reduction in the subsequent years commitments may be obtained. However, in the event that the first well does not yield results in line with expectations, the Company and New Horizon may elect to gather additional information, such as 3D seismic, prior to additional drilling.
Read B. Taylor, President and CEO of Petro Vista, comments, "We believe the La Maye acquisition is a strategic transaction for the Company and our shareholders as part of our balanced mix of low-risk and near-term production opportunities for significant exploration upside potential. The La Maye asset offers the Company an opportunity to explore for significant oil reserves by the end of the year at low cost."
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