TORONTO, Nov. 24, 2011 /PRNewswire/ - PetroMagdalena Energy Corp. (TSXV: PMD) is pleased to announce that it has executed a conditional assignment agreement whereby it will acquire an additional 32.5% working interest in the Arrendajo block in the Llanos basin. In addition, the Company announces the conclusive and final settlement with Beta Energy Corp., whereby it regains control of two rigs located in Colombia, one of which will be used to drill the upcoming Yopo exploration well on the Cubiro block.
Luciano Biondi, the Company's Chief Executive Officer stated, "When new management took over the Company earlier this year, our priorities were to focus on re-establishing investor confidence in the portfolio, develop our core oil assets, clean up our financial position, improve our cash flow, and increase production. The acquisition of an additional interest in Arrendajo, which is close to our core property Cubiro, and the settlement with Beta Energy are consistent with these objectives and we are pleased that through our recent exploration and development success, production continues to grow."
Acquisition of Additional Interest in Arrendajo
The Company has entered into an assignment agreement, conditional only upon the approval of the Agencia Nacional de Hidrocarburos (ANH), with Pacific Stratus Energy Colombia Corp., Sucursal Colombia, a subsidiary of Pacific Rubiales Energy Corp. When this process is duly completed, PetroMagdalena will have a 67.5% participating interest in the Arrendajo Block.The block covers an area of 31,606 hectares, and it is located only 5 km to the north-east from the Cubiro Block. Its exploration plays are of the same type as in the Cubiro Block, where PetroMagdalena has recently discovered three light oil fields and added 5 million barrels of 2P reserves. Operations at Arrendajo will be supported by the pre-existing main operations base of the Company on the nearby Cubiro block.