Gold Oil announced that it's wholly owned subsidiary, Gold Oil Caribbean Limited, has entered into a Sale and Purchase Agreement with Capricorn Oil and Gas Limited for the acquisition of all of the issued shares in Plectrum Petroleum Limited.
Plectrum is a UK registered company that has a Peruvian branch which holds a 50% working interest in the Z34 offshore exploration and exploitation contract in Peru. Gold had a 'carry' from Plectrum, whereby all Gold's costs would be paid for by Plectrum through the first phase work program under the license for up to 2,550 km of 2D seismic plus processing.
Under the terms of the agreement, Gold will receive USD $1,500,000 in compensation for the loss of the benefit of the 'carry' and additional 50% interest in the license.
This transaction brings Gold's working interest in the Z34 block to 100%.
PeruPetro approved the 30 year oil and 40 year gas contract on December 6, 2006 and the Minister of Energy and Mines signed the contract in February 2007. The terms of the license are very attractive with a royalty rate of 5% rising to a maximum of 20%, if and when production reaches 100,000 bopd.
The Environmental Impact Assessment for the block was obtained in September 2008 and Gold is now actively preparing for the 2D seismic survey for later this year.
Gary Moore, Gold's CEO, said, "We are delighted to have secured this interest, particularly given the recent gas discovery to the south and Shell's $300 million farm-in to the north of the block."
The Company has now employed a new Country Manager for Colombia whose main responsibility is initially to drive the Nancy Burdine development when we assume operatorship of the fields in November of this year.
The Company expects that the exploration well on the Rosa Blanca field in Colombia will spud in early December 2008. While the Company recently received an initial offer from an undisclosed party, this offer was subject to 90 days due diligence. The board felt that this offer was not in the best interests of shareholders as it did not recognise that the results of Rosa Blanca would occur during the option period which your Directors hope will be a significant find.
Peru Block XXI
Seismic and a three well program are planned for 2009 in Peru.
A reserves report is being prepared for the Annual Report and it is expected that current proven reserves in Nancy of 27,000 barrels will increase. We believe that the current share price undervalues the Company.
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