Following the transaction, Houston American now owns a 1% stake in the Venus Exploration area as well as a 0.5% interest in the remainder of the block
Houston American Energy has acquired a membership interest in Hupecol Meta, which owns the CPO-11 block in the Llanos Basin in Colombia, for an undisclosed amount.
The 639,405 gross acre CPO-11 block comprises the 69,128 acre Venus Exploration area which is operated by Hupecol Operating, and 570,277 acres which was 50% farmed out to Parex Resources by Hupecol last year.
Houston American, through its membership interest, owns a 1% stake in the Venus Exploration area as well as 0.5% interest in the remainder of the block.
Hupecol is planning to commence drilling in the Venus Exploration area beginning with the Venus-1 horizontal well in December 2019.
As per the farm-out agreement covering the balance of the CPO-11 block, Hupecol plans to drill the Daisy-1 vertical well in November 2019 followed by the Montuno-1 well at no cost to Houston American, in February 2020.
Drilling of additional wells is planned during 2020 based on initial drilling results.
Houston American Energy CEO Jim Schoonover said: “We are excited to resume our operations in Colombia alongside our historic partner, Hupecol, and Parex, a leading operator in Colombia.
“In addition to participation in a potential large scale drilling and development program represented by CPO-11, we expect that resumption of our investment alongside Hupecol and investing alongside Parex will offer the potential to further expand our footprint in Colombia.
“The addition of CPO-11 compliments our recent efforts to expand our acreage position which, over the last year, has resulted in the acquisition of positions in two blocks in the Midland sub-basin of the Permian Basin totaling approximately 6,500 gross acres plus the 639,000+ gross acre CPO-11 block.
“Together, we expect those acquisitions to provide a multi-year inventory of drilling prospects with the potential return to growth in production, proved reserves, revenues and a potential return to profitability.”
CPO-11 block comprises multiple identified leads and prospects
Covering 1,609.3km2, the CPO-11 block comprises multiple identified leads and prospects which are expected to support a multi-well drilling program.
In August 2019, Houston American agreed to acquire a 20% stake in an existing 5,871 gross acre block in the San Andres formation in the Northern Shelf of the Permian Basin in the US from an undisclosed seller.
As per the terms of the agreement, Houston American agreed to bear 26.667% of the expenses incurred on an initial test well through the point at which it is drilled, completed, equipped and set for operation, production or disposal.