Sagres Finalizes Farmout Agreement with Canacol Energy on El

Sagres Finalizes Farmout Agreement with Canacol Energy on El Triumfo
Block in Colombia 
CALGARY, ALBERTA -- (Marketwire) -- 11/06/12 -- Sagres Energy Inc.
(the "Company") (TSX VENTURE:SGI) announced today that it has
finalized its farmout agreement with Canacol Energy Ltd. on the El
Triunfo Block, which is comprised of 25,205 gross acres in the
oil-rich Llanos Basin in the Department of Casanare, Colombia (the
"Block"). The Block contains an undeveloped discovery well, La
Cabana-1, that was drilled in 1984, on the flank of the 3D
seismically defined San Sebastian prospect, and tested 736 bopd with
water from the Mirador Formation and 338 bopd with no water from the
Gacheta Formation, however was not put on production due to
mechanical reasons. To date, there has been no commercial production
on the Block, but there are several undrilled prospects that have
been identified on 3D seismic. 
As previously announced Sagres entered into a purchase and sale
agreement and farmout agreement to acquire the right to earn a
participating interest in the Hydrocarbon Exploration and Production
Agreement (the "E&P Agreement") related to the Block. Pursuant to the
terms of the E&P Agreement, the participating interest holders are
required to drill two exploration wells on the Block. Sagres has the
right to earn an undivided 70% participating interest and assume
operatorship in the Block by paying 100% of the costs relating to the
first of the two wells, with the opportunity to earn an additional
12.5% participating interest after the drilling of the second well. 
Under the terms of the farmout agreement among Sagres and Canacol,
Canacol acquired 50% of Sagres' 70% net working interest in the Block
by agreeing to pay 50% of outstanding back costs related to the
Block, which is approximately US $2,432,380, and by paying its
pro-rata share of future costs related to the Block. In exchange for
the back cost payment, Sagres issued Canacol an interest-free secured
promissory note which will fall away upon the spudding of the first
well on the Block. Canacol also has an option to pick up an
additional 10% working interest from Sagres, up until the spudding of
the first well, by paying 20% of the total costs associated with
Phase 5 of the exploration program, which includes the drilling of
the first exploration well along with all related G&G and other
associated costs. 
Promissory Notes 
Sagres also announces that it has entered into a promissory note with
Aberdeen International Inc., pursuant to which Aberdeen has agreed to
lend the Company US$350,000. Sagres also entered into a second
promissory note with Forbes & Manhattan, Inc., pursuant to which
Forbes has agreed to lend the Company US$150,000. The Company intends
to use the proceeds of the promissory notes for general working
capital purposes. The principal under the promissory notes will incur
an interest rate of 8% per year and shall mature on October 18, 2013.
The promissory notes are secured against all of the assets of Sagres. 
About Sagres 
Sagres Energy Inc. is a Canadian based international oil and gas
exploration company with exploration assets in Colombia. The common
shares of Sagres are listed for trading on the TSX Venture Exchange
under the symbol "SGI".  
Regulatory Statements 
This press release contains "forward looking information" within the
meaning of applicable Canadian securities legislation. Forward
looking information includes, but is not limited to, statements with
respect to the farmout of the Block; the potential of the Block; the
entering into of promissory notes and the use of proceeds of the
promissory notes. Generally, forward looking information can be
identified by the use of forward-looking terminology such as "plans",
"expects" or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could",
"would", "might" or "will be taken", "occur" or "be achieved".
Forward-looking information is subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of the Company to be
materially different from those expressed or implied by such
forward-looking information, including but not limited to: general
business, economic, competitive, geopolitical and social
uncertainties; the actual results of exploration activities;
regulatory risks; risks inherent in foreign operations; and other
risks of the oil and gas industry. Although the Company has attempted
to identify important factors that could cause actual results to
differ materially from those contained in forward-looking
information, there may be other factors that cause results not to be
as anticipated, estimated or intended. There can be no assurance that
such information will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward looking information. The Company does not undertake to update
any forward-looking information, except in accordance with applicable
securities laws. 
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER
(AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE)
ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE. 
Contacts:
Sagres Energy Inc.
Jaime Lalinde
CEO
(+571) 805-0240
 
 
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