Benchmark to Acquire Rancho Hermoso

Calgary-based junior Benchmark Energy has entered into an agreement to buy 100% of Colombian oilfield operator Rancho Hermoso, the former said in a statement.

Benchmark will hold onto 90% of Rancho's shares and Nevada-based Radial Energy will acquire the remaining 10%.

"This will establish Benchmark as a solid operator in Colombia which should open the doors to many more opportunities there," Benchmark chairman Larry Youell said.

The purchase price of the transaction, to be paid by Benchmark, totals US$30mn and includes a US$1mn pre-closing dividend to be paid to Rancho's current shareholders out of Rancho's working capital.

Benchmark has entered into a bridge loan facility with Quest Capital for US$9mn, which together with US$1mn of Benchmark's own funds is being held in until the scheduled close of the transaction on July 31, the statement said.

Benchmark will be acquiring nearly 1,300b/d of net oil production through the acquisition.

Rancho Hermoso is a privately held Colombian oil production company that operates two oilfields in the Llanos basin of Casanare department.

"We are particularly pleased that this agreement has been reached because of the fundamental merits of the oil fields we are acquiring," Youell said.

Benchmark holds blocks in Tunisia and Indonesia, according to the company's website.

Radial Energy acquires and develops low-risk oil and natural gas properties throughout the Americas.

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