Alange Closes Acquisition in Cubiro Block
Alange announced the closing of its previously announced acquisition of additional interest in the Cubiro block pursuant to a share purchase agreement entered into with Columbus Energy Inc. whereby the Company has acquired:
- an additional 32.14% participating interest in Block C of the Cubiro Exploration and Production Contract ("E&PC") located in the Llanos Basin. The Copa wells in the eastern Block C of Cubiro, where the Company already holds a 25% participating interest, are currently producing approximately 1,800 barrels of oil per day, before deduction of royalties, and this acquisition would increase the Company's share of gross production by almost 600 barrels per day. Based on the evaluation of the interests of the Company in the Cubiro Block prepared by Petrotech Engineering Ltd. as of June 30, 2010, this acquisition is expected to increase Alange Energy's share of total gross proven, probable and possible oil reserves by 2.0 million barrels.
- a 10% participating interest over the entire block and a 15% participating interest in the Yamu 1 and Mapuro/Picure 1 exploration prospects on the Yamu E&PC, located in the Llanos Basin. Current gross production from the Yamu Block is approximately 900 barrels of oil per day and the Company's share would amount to approximately 90 barrels per day.
- overriding royalties of 4% and 3% in the A and B Sectors, respectively, of the Arrendajo E&PC, in which the Company holds a 35% working interest.
The acquisition of the interests has been effected through the acquisition by the Company of all of the issued and outstanding shares of Columbus' wholly-owned subsidiary, Jaguar E&P CPR Consultants, S.A., for a purchase price of US $25 million. The purchase price was funded by the Company's existing cash balances. These funds will be replenished upon the closing of the previously announced senior secured notes and warrants financing (the "Offering") of the Company with gross proceeds of approximately CA$27 million. The Offering is expected to close on or around April 26, 2011.