Petro Vista Energy Corp., an independent oil and gas exploration and production company, is pleased to announce that its wholly-owned Colombian subsidiary Petropuli Ltda. has signed a participation agreement with Golden Oil Corp., a private Korean company with oil and gas exploration and production assets in Colombia, Argentina and Canada. Pursuant to the Agreement, Petro Vista will farm-out a 35% participating interest in the Morichito Block located in the Llanos Basin, Colombia. Petro Vista will remain operator with a 35% participating interest.
In announcing the agreement, Petro Vista President, Read B. Taylor commented, "The farm-out agreement with Golden Oil, in combination with the farm-out of a 35% net working interest to Omega Energy Colombia and Green Power Corporation (as previously announced January 19, 2009), allows Petro Vista to complete the Morichito #2 discovery well and drill its two high-value prospects Morichito #1N and Morichito #3 at no capital cost. The farm-out is complementary to our strategy of leveraging value from our assets as well as a risk reduction tool on exploration blocks. We look forward to working with our partners and achieving our production goals in the Morichito block."
Under the terms of the agreement, the Farmee will acquire an aggregate 35% participating interest by paying:
Other than the initial US$500,000 deposit, these funds will be applied to Petro Vista and Golden's aggregate 70% cost obligations for the Morichito #1N and #3 exploration wells on the Morichto Block. The Farmee is also obligated to pay its participating interest share of any costs on these wells and the currently drilling Morichito #2 completion well that are over and above the AFE amounts. Any excess monies will be used to cover Petro Vista and Golden's future obligations until expended.
The estimated total value of the Farm-out to the Company is US$4,400,000 dollars.
The completion of the transaction is subject to all necessary approvals including approval to the assignment by the Agencia Nacional do Hidrocarburos and the acceptance of the transaction by the TSX Venture Exchange.
The Morichito Block
The Morichito Block is located in the Llanos Basin, Colombia, and comprises 57,252 gross acres. Extensive geotechnical (3D seismic reprocessing and well log evaluations) and engineering analysis has been completed on five exploration prospects in the Block. A discovery well at Morichito #2 was drilled on trend with several of these prospects in 2006.
On February 25, 2009, Petro Vista initiated operations at the Morichito #2 discovery well. The Company anticipates approximately 10 to 14 days of testing and completion. Two to three zones previously identified in log analysis and determined to be prospective will be evaluated during this testing period. The Morichito #1N prospect exploration well is planned with mobilization set to occur in mid-March. The second exploration well (Morichito #3) is set to follow once Morichito #1N is completed. Additional results and information will be forthcoming.
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