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Sintana Energy Announces VMM-37 Farmout Agreement with ExxonMobil


Sintana Energy Announces VMM-37 Farmout Agreement with ExxonMobil

TORONTO, Nov. 12, 2012 /CNW/ - Sintana Energy Inc. (TSX-V: SNN) ("Sintana" or the "Company") is pleased to announce that Patriot Energy Oil & Gas Inc. ("Patriot"), wholly-owned by the Company, has entered into a Farmout Agreement (the "Agreement") with ExxonMobil Exploration Colombia Limited, a wholly owned subsidiary of Exxon Mobil Corporation ("ExxonMobil") (NYSE: XOM) for the exploration and development of unconventional oil and gas resources underlying the 43,000 acre VMM-37 Block in Colombia's Middle Magdalena Basin.   Major elements of the VMM-37 Agreement are as follows:

PARTICIPATION INTERESTS:


    --  Subject to approval by the Agencia Nacional de Hidrocarburos of
        Colombia (the "ANH"), ExxonMobil will acquire an undivided 70%
        participation interest and operatorship in the formations
        defined as unconventional by completing the Work Program
        described below.
    --  Patriot will retain the remaining 30% interest in the
        unconventional play as well as its current 100% participation
        interest in the conventional resources overlying the top of the
        unconventional interval.

UNCONVENTIONAL vs. CONVENTIONAL:
    --  For purposes of this Agreement, unconventional formations are
        defined as the La Luna and deeper.

WORK PROGRAM:
    --  ExxonMobil will pay 100% of all Exploration Phase I well costs
        (3 wells).  The estimated timing for the commencement of
        drilling operations on the first exploration well is the third
        quarter of 2013.  A consideration will be paid that will
        compensate Sintana for its past expenses connected with the
        block.
    --  ExxonMobil will have an option to proceed to the next phase. 
        In this development phase, it will pay 100% of all additional
        costs to a maximum of US $45 million, of which US $10 million
        will be recouped by ExxonMobil from 50% of Patriot's production
        proceeds.
    --  As agreed by Patriot and ExxonMobil, as joint participants in
        the Block, good faith efforts will be made to locate
        exploration wells targeting the unconventional play in such a
        way as to also test conventional prospects.
    --  At various stages of the Work Program, as defined in the
        Agreement, ExxonMobil will have the right to withdraw from the
        project, relinquish operatorship and reassign to Patriot the
        right to the 70% participation interest it would have retained
        had it met all investments and activities requirements of the
        Agreement.

SUPPLEMENTAL INVESTMENT CAPITAL:
    --  In the event that exploration and development of the
        unconventional resources continue beyond the activities and
        costs enumerated above, those costs will be shared based on the
        parties participating interests.
    --  Further exploration and subsequent development plans for the
        unconventional and conventional formations will be decided on
        once technical data obtained from drilling the deeper
        unconventional play, and other sources, are analyzed.

WARRANTIES:
    --  The ANH requires that operators provide secured performance
        warranties for various phases of the contractual Work Program. 
        Sintana currently has in place a letter of credit in
        satisfaction of this requirement.  ExxonMobil will assume
        responsibility for providing these warranties resulting in the
        release of restricted Sintana funds currently on deposit to
        secure the existing letter of credit.

Sintana's CEO, Doug Manner, commented, "Both the conventional and 
unconventional formations on VMM-37 offer tremendous potential for large 
discoveries with compelling economics.  ExxonMobil owns interests in, and is 
the operator of, a number of very large, highly complex unconventional 
projects in multiple countries.  It is on the leading edge of developing and 
applying highly technical methods and complex processes to discover, develop 
and produce unconventional reserves.  We are fortunate to have ExxonMobil as 
our partner and look forward to a long and very successful working 
relationship."

The Company will host a conference call on November 13(th) at 2:00 pm (EST) to 
discuss key highlights of the transaction.  A question and answer session 
will follow.  Details regarding the conference call, including dial-in 
instructions, will be disclosed later today.

ABOUT SINTANA ENERGY

The Company is primarily engaged in petroleum and natural gas exploration and 
development activities in Colombia and Peru. The Company's exploration 
strategy is to acquire, explore, develop and produce superior quality assets 
with significant reserve potential.  The Company currently holds a 25% 
interest in the 175,000 acre Bayovar Block XXVII in the Sechura Basin, Peru. 
The Company's private participation interests in Colombia include 30% in 
58,570 acres in the Talora Block and 30% in 272,021 acres in the COR-39 & 
COR-11 Blocks in the Upper Magdalena Basin. In the Middle Magdalena Basin, 
private participation interests are 100% in the 43,158 acre VMM-37 Block and 
25% (carried) in the 154,909 acre VMM-4 and 59,522 acre VMM-15 Blocks. In the 
Llanos Basin, the company has a carried 25% private participation interest in 
the 11,624 acre LLA-18 Block. These interests are subject to all applicable 
regulatory and governmental approvals, including those of Colombia's 
National Hydrocarbon Agency (ANH). The Company continues to evaluate a 
portfolio of exploration opportunities in South America.

On behalf of Sintana Energy

"Doug Manner" 
Chief Executive Officer

Forward-Looking Statement

This news release includes forward-looking statements related to the expected 
occurrences in relation to the properties identified. A multitude of factors 
can cause actual events to differ significantly from any anticipated 
development and although the Company believes that the expectations 
represented by such forward-looking statements are reasonable at the time of 
preparation; there can be no assurance that such expectations will be realized 
in whole or in part. These forward looking statements are based on assumptions 
that the Company has made concerning the oil and gas industry in South 
America, that all applicable regulatory approvals will be obtained, the 
reliability of available data regarding the properties and increasing demand 
for oil and gas. Risk factors which may cause actual results to differ from 
those anticipated in such forward looking statements include but are not 
limited to, the risk that ExxonMobil may opt to withdraw from the VMM-37 
project at various stages of the work program, risks associated with the 
uncertainty of exploration results and estimates, currency fluctuations, the 
uncertainty of conducting operations under a foreign regime, exploration risk, 
the uncertainty of obtaining all applicable regulatory approvals, the 
availability of labour and equipment, the fluctuating prices of oil and 
natural gas, the availability of financing and the Company's dependence on 
Sintana's management personnel and other participants in the property areas, 
including ExxonMobil. Neither the Company nor any of its subsidiaries nor any 
of its officers or employees guarantee that the assumptions underlying such 
forward-looking statements are free from errors, nor do any of the foregoing 
accept any responsibility for the future accuracy of any of the opinions 
expressed in this document or the actual occurrence of forecasted developments.

Undue reliance should not be placed on these forward-looking statements as 
there can be no assurance that such expectations will be realized. The 
forward-looking statements contained in this document are made as of the date 
hereof and the Company undertakes no obligation to update publicly or revise 
any forward-looking statements or information, whether as a result of new 
information, future events or otherwise, unless so required by applicable 
securities laws. This press release does not constitute an offer to sell or a 
solicitation to buy any of the securities of Sintana Energy Inc. in the United 
States.

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.

For additional information or to receive timely updates about Sintana's  South 
America projects and recent corporate activities please visit the  Company's 
website at www.sintanaenergy.com or email info@sintanaenergy.com.

Corporate Contact:

Douglas Manner Chief Executive Officer Tel: 832.279.4913

Corporate Contact:

Sean Austin Vice President Tel: 713.825.9591

SOURCE: Sintana Energy Inc.

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/November2012/12/c6993.html

CO: Sintana Energy Inc.
ST: Ontario
NI: OIL ORDER LOAN MNA 

-0- Nov/12/2012 15:00 GMT

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