After completion of the work programme and related expenditures, ownership of the block will be 25% by Petrolifera, as operator; 25% by Americas Petrogas; 25% by Brownstone Ventures (Brownstone); and 25% by Serrante, a private company related to Americas Petrogas.
Under the terms of the farmout, Petrolifera will be reimbursed for certain past costs incurred by the company and will be carried for its share of anticipated costs of the remaining exploration activities needed to fulfill the work units, under the first period of the exploration permit originally awarded to Petrolifera, which expires on May 31, 2010.
The exploration activities for which Petrolifera will be reimbursed or carried, at no cost to Petrolifera, include the drilling of four exploratory wells (depths ranging from 1,000 meters to 1,500 meters), reimbursement of the back-costs of the exploratory well VM-2014 and, if required, payments in cash to the government of Rio Negro for the value of the outstanding amount for any work units that have not been incurred by the end of the first exploration period.
Exploratory well VM-2014, drilled and cased by Petrolifera with its existing joint venture partner Brownstone, encountered a number of zones of interest, including some with crude oil shows in side wall cores, and it will shortly be under evaluation for testing and possible completion as a new discovery.
Petrolifera is a Calgary-based crude and natural gas exploration, development and production company with onshore holdings in Argentina, Colombia and Peru.
