Chevron & Vinccler Team Up in the Gulf of Venezuela

Chevron and Vinccler Oil and Gas, the wholly-owned subsidiary of PetroFalcon Corporation, announced the signing of an agreement and the mobilization of a 3D seismic vessel on the Cardon III Block in the Gulf of Venezuela.

Vinccler and Chevron recently signed a Heads of Terms agreement whereby Vinccler will acquire a 30 percent working interest from Chevron in the offshore natural gas license for the Cardon III Block. Under the terms of the agreement, Chevron remains operator and majority partner with a 70 percent interest. PDVSA, the Venezuelan state-owned oil and gas company, retains the right to acquire up to 35 percent of the project after declaration of commerciality.

Ali Moshiri, President of Chevron Latin America, said, "We are pleased to have Vinccler Oil and Gas as our new local partner, and we are enthusiastic about exploring for natural gas together on the Cardon III Block in order to supply the growing natural gas market in Venezuela."

Juan Francisco Clerico, Vinccler's Chief Executive, said, "We look forward to developing offshore natural gas with Chevron in the Gulf of Venezuela. The Cardon III Block is strategically located near our existing onshore acreage, as well as our offshore gas license option on the nearby Castilletes NE II Block. Through this partnership, Vinccler Oil and Gas will increase its acreage position in western Venezuela and diversify its business outside of the existing PetroCumarebo joint venture with PDVSA. Chevron has extensive offshore experience in Venezuela and a track record of success in developing significant natural gas reserves."

The transaction is subject to approval from the Venezuelan Ministry of Energy and Petroleum, as well as the signature of assignment and joint operating agreements between Chevron and Vinccler.

Chevron was awarded the Cardon III Block with the high bid of US$5.6 million in the first phase of the Rafael Urdaneta Project in 2005. The Cardon III Block covers an area of 880 square kilometers (approximately 218,000 acres) and is located in relatively shallow waters, 38 kilometers northwest of the Paraguana Refinery Complex, the world's largest refinery.

The acquisition of 530 square kilometers of 3D seismic over the Cardon III Block started on February 18th and will be complete in approximately 50 days, weather permitting. As part of their new partnership, Vinccler and Chevron will soon announce joint social development projects in the local communities of Falcon State in western Venezuela, nearby both the Cardon III Block and Vinccler's existing onshore production.

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