TORONTO, Feb. 29, 2012 /PRNewswire/ - PetroMagdalena Energy Corp. (TSXV: PMD) announced today that it has entered into a binding letter of intent with Interoil Colombia E&P Inc. in respect of a 50% participation to farm in to the LLA-47 block located in the Llanos just south and on trend with the company's main Cubiro block and other producing blocks in the basin.
The LLA-47 is located in the prolific Llanos basin and covers an area of 447 km 2. Interoil has owned a 100% of the working interest on the block and is the current operator. The Company has agreed to undertake a $30 million work program commitment in the three years of Phase 1 of the E&P contract with the ANH. This transaction is subject to approval by the ANH. In addition, the Company shall pay a $2 million signing fee upon receipt of ANH approval.
Luciano Biondi, Chief Executive Officer of the Company stated: "We are looking forward to working with InterOil and expanding the cooperative relationship developed over the last few years as we have adjacent operations with their Altair Block on the southern boundary of Cubiro. This allows us to leverage our in-depth Cubiro experience to an exciting new block with the same geological and surface characteristics and logistical aspects. With the existing 2D seismic indicating the existence of several exploration leads similar to those on the Cubiro block, that will be matured with 3D seismic as the first activity prior to exploration drilling, we are pleased to have added a very prospective Llanos exploration program to our portfolio."
PetroMagdalena is a Canadian-based oil and gas exploration and production company, with working interests in 19 properties in five basins in Colombia. Further information can be obtained by visiting our website at www.petromagdalena.comAll monetary amounts in U.S. dollars unless otherwise stated. This news release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian securities laws concerning the business, operations and financial performance and condition of PetroMagdalena. Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to estimated production and reserve life of the various oil and gas projects of PetroMagdalena; the estimation of oil and gas reserves; the realization of oil and gas reserve estimates; the timing and amount of estimated future production; costs of production; success of exploration activities; and currency exchange rate fluctuations. Except for statements of historical fact relating to the company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of PetroMagdalena and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions, risks relating to international operations, fluctuating oil and gas prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the oil and gas industry, failure of plant, equipment or processes to operate as anticipated. Although PetroMagdalena has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. PetroMagdalena undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements. Neither 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 news release. SOURCE PetroMagdalena Energy Corp.