Amerisur Resources Plc ("Amerisur" or the "Company") - $93.25m farm-out signed with Occidental Andina

Source Press Release
Company Occidental Petroleum CorporationAmerisur Resources Plc 
Tags Asset Deals, Deals, Exploration, Upstream Activities
Date November 23, 2018

Amerisur Resources Plc, the oil and gas producer and explorer focused on South America, is pleased to announce that it has entered into a farm-out agreementwith Occidental Andina, LLC, an affiliate of Occidental Petroleum Corporation, an international oil and gas exploration and production company with operations in the United States, Middle East and Latin America, across the following exploration blocks: Putumayo-9, Terecay, Tacacho and Mecaya, (the "Farm-out Blocks"), all in the Putumayo region, in southern Colombia.

In consideration of the acquisition of a 50% interest in each block, Occidental Andina will fund a $93.25m exploration and appraisal program between 2019-2021. Occidental Andina will fund 85% of the total planned 2D seismic cost expenditure of US$65,000,000 and 100% of the US$38,000,000 planned drilling program.

The companies have agreed there will be a dedicated transport capacity in the OBA for the transport of oil from the Farm-out Blocks, with a commercial tariff charged for Occidental Andina's share.

Amerisur Exploracion Colombia, a subsidiary of the Company will be the operator of the Farm-out Blocks, which extend over 1.4 million acres and have prospective resources of 656 MMBO. The work program includes the acquisition of 878 Km of 2D Seismic and the drilling of five exploration wells.

Completion of this transaction is conditional on approval from the Agencia Nacional de Hidrocarburos ("ANH") and all parties will now work towards obtaining this.

John Wardle, CEO of Amerisur said:"

It gives me great pleasure to welcome Occidental Andina as our partner into these important blocks. Occidental Andina has a long and distinguished history in Colombia, with great understanding of the geological and operating environment, and an outstanding technical team with whom we enjoy a close and harmonious relationship.

"The farm out recognises the significant value we have created during our growth phase over the last few years and this transaction will now amply fund, widen and bring forward our exploration programmes in the Put-9, Tacacho, Terecay and Mecaya properties, which we and our new partner believe to hold very substantial resource potential. As operator, we are already working on the programmes to be executed in these blocks and expect to progress those activities in the near term."

Giles Clarke, Chairman of Amerisur said:"

The farm-out to Occidental Andina is a strong endorsement of the attractiveness of our acreage position in the Putumayo basin and Colombia, which we built at low cost in the oil market downturn, and the value of the OBA pipeline for the evacuation of oil from these blocks.  It accelerates our upcoming work programme while significantly reducing our future capex requirements. We have been committed to working through the social issues in the region and continue our ongoing support of the peace process.  I would like to thank our shareholders for their continued patience and support of Amerisur's growth ambitions."

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd