Apco has entered into a farm-in agreement that will expand its oil and gas development in Argentina's Neuquen Basin where it has been active for more than 40 years.
Apco can earn up to a 45 percent participation interest in the Coiron Amargo block in exchange for completing a two-stage four-well drilling commitment during 2010 and 2011. Coiron Amargo covers approximately 100,000 gross acres.
Apco entered into the agreement with Madalena Ventures Inc. and ROCH S.A., an Argentine oil and gas company. Gas y Petroleo de Neuquen S.A. -- the energy company of the province of Neuquen -- also is a participant in the Coiron Amargo property and approved Apco's participation.
The agreement requires Apco to drill two exploration wells during 2010 to earn a 22.5 percent interest. The terms also include an option for Apco to drill two more wells during the latter part of 2010 and in 2011 to increase its interest to 45 percent in the entire Coiron Amargo block.
Within the Neuquen Basin, Apco is active in the Entre Lomas, Bajada del Palo and Agua Amarga areas. Along with the Coiron Amargo area, these properties represent approximately 490,000 gross acres.
"Our evaluation indicates that the subsurface geology is quite similar to that found in the southeast part of our Entre Lomas concession and to what we have encountered since 2007 in the Bajada del Palo and Agua Amarga blocks," said Thomas Bueno, Apco's president and chief operating officer.
"In Coiron Amargo, we hope to apply the same geologic model that we have successfully used to drill exploration wells over the last few years in our adjacent blocks," Bueno added.
The Coiron Amargo properties, operated by ROCH S.A., are currently permitted under a three-year exploration period expiring in November 2010 after which the acreage associated with commercial discoveries can be converted to a 25-year exploitation concession.
The partners plan to request an extension of the exploration period on the Corion Amargo properties to facilitate the second phase of drilling associated with the farm-in agreement. Apco expects to commence drilling by mid 2010.
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