Kappa Energy Colombia has acquired CEPSA's (Compania Espanola de Petroleos, S.A.) 100% interest in the Abanico Association Contract effective April 21st, 2003. Located in Colombia's Upper Magdalena Basin, this 220,000-acre contract includes the shallow sole risk Abanico Oil Field currently producing upwards of 300 BOPD, and numerous large exploration prospects some of which are on trend with the recent Braspetro/Nexen Guando discovery. This new acquisition significantly expands Kappa's holdings within its Upper Magdalena core focus area where the company also operates two other Association Contracts: the Chipalo Block in partnership with LukOil, and the Maito Block in partnership with Tethys Petroleum.
Using its own drilling rig, Kappa plans to fully develop the Abanico Field and quickly increase production to greater than 1000 BOPD. This production along with cash flow from Kappa's Cerrito Gas Field, where a successful step-out has recently been tied-in, will be used to fund on-going E&P projects on Kappa held acreage in the Upper and Middle Magdalena basins and Catatumbo Basin, and to pursue pending new business ventures.