Quetzal Updates Ops in Colombia

- Quetzal Updates Ops in Colombia

Wednesday, July 20, 2011
Quetzal Energy Ltd.

Quetzal provided the following update on operations in Colombia

The long term production testing of Canaguay #1 is continuing with the well currently producing approximately 500 barrels of oil and 150 barrels of water. The optimal production rate for the Mirador reservoir and facilities will be determined by the results of the long term production test.

Quetzal has a 25% working interest and is acting as the operator of the Canaguaro block and the Canaguay #1 well.

Block 27

A follow-up 54 square kilometer 3D seismic acquisition program has been completed in the south eastern portion of the block, and is currently being interpreted. The Company has defined drilling locations on three separate Block 27 structures, based on the interpretation of 3D seismic. Potential follow-up development drilling locations have been identified on several of these structures. Interpretation of the 3D seismic is continuing and several additional geological features are being studied as potential drilling locations.

Lengthy delays in the issuing of block environmental permits continue to adversely effect the operations of both large and small oil companies in Colombia. Quetzal has waited approximately 8 months for the Block 27 environmental permit. It is anticipated that permit will be granted during the 3rd quarter of 2011. Construction of drilling locations is scheduled to begin as soon as the required environmental permit is received. A two to three well drilling program is planned to commence approximately one month after location construction begins. The wells have a planned depth of approximately 10,000 feet and will test prospective oil bearing intervals in the Carbonera, Mirador and Une Formations.

Quetzal has a 50% paying interest in the block and is acting as operator.

Block 21

An 83 square kilometer 3D seismic survey has been competed on Block 21 and is currently being interpreted. Several geological features are being studied as potential drilling locations. The Company plans to drill 2 wells during the 4th quarter of 2011 or the 1st quarter of 2012.

Quetzal has a 50% paying interest in the block and is acting as operator.

Block 36

The acquisition of 109 square kilometers of 3D seismic on Block 36 has been completed and is being processed. Drilling of one 15,000 foot well is scheduled for 2012.

Quetzal has a 20% paying interest in the block.

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PetroLatina Farms-Out Colombia Block to Shell

- PetroLatina Farms-Out Colombia Block to Shell

Friday, July 15, 2011
PetroLatina Energy plc

PetroLatina has entered into a farm-out agreement with Shell E&P Colombia, effective July 12, 2011. Under the terms of the agreement, Shell E&P Colombia will acquire an 85% participating interest in the Company's VMM-28 Exploration and Production contract, subject to the approval of the ANH. The VMM-28 block is currently wholly owned and operated by Petroleos del Norte (PDN), PetroLatina's Colombian operating subsidiary.

PDN and the ANH signed the formal E&P Contract in March 2011, for the exploration, development and production of hydrocarbons in the area known as the VMM-28 block. The block covers an area of 54,552 hectares (approximately 136,390 acres) and lies to the west of, and immediately adjacent to, the Company's existing La Paloma block containing the Company's producing Colon field. Preliminary analysis of the available historic 2D seismic data suggests that the type of structure which has proven to be oil productive on the La Paloma block may also potentially hold commercial oil reserves on the VMM-28 block. The current carrying value of the Company's interest in the VMM-28 block is approximately US $4.64 million.

In accordance with the terms of the farm-out agreement, which remains subject to regulatory approval from the ANH, Shell E&P Colombia has agreed to pay a fee of US $15 million in cash to PetroLatina, of which US $3 million is payable on execution of the agreement and the balance of US $12 million is payable on receipt of the requisite ANH approval. Shell E&P Colombia will be appointed as operator of the contract and will take responsibility for the work program. In the event that ANH approval is not forthcoming by 30 September 2011, Shell E&P Colombia has the right to terminate the agreement and require any payments made by it to PetroLatina to be repaid.

The VMM-28 E&P Contract comprises two 3 year exploration periods ("Phase 1" and "Phase 2") followed by a 24 year production phase. In accordance with the E&P Contract in place with the ANH, work obligations for the VMM-28 block include the acquisition of 2D seismic and one exploratory well during Phase 1 (the first 3 year exploration phase), and either two wells without relinquishment of any acreage or one well with 50% relinquishment during Phase 2 (the second 3 year exploration phase). Under the terms of the farm-out agreement, PetroLatina has granted Shell E&P Colombia a six year period of operational exclusivity. During this Exclusivity Period, Shell E&P Colombia will pay for 100% of the costs, expenses and liabilities associated with the work program and shall be entitled to all rights in relation to the block.

Shell E&P Colombia will make available to PetroLatina all data acquired by it in relation to the contract area and ensure that the license area remains in good standing and will comply with all applicable laws, regulations and orders of Colombia.

Under the agreement, Shell E&P Colombia will obtain an 85% participating interest in the block. PDN will retain a 15% legal interest with an option to participate in the block upon expiration of the Exclusivity Period. Under the terms of the farm-out agreement, PetroLatina shall pay its share of the costs, expenses and liabilities associated with the block and shall pay Shell E&P Colombia for its share of Shell E&P Colombia's total sunk costs incurred to such date, out of PetroLatina's share of production within the block. Operations on the VMM-28 block would thereafter be governed by a joint operating agreement.

In the event that Shell E&P Colombia decides to withdraw from the farm-out agreement, the Company has the option to request that Shell E&P Colombia transfers its prevailing interest in the block back to PetroLatina.

Following the receipt of ANH approval, the Company intends to use the proceeds from the farm-out agreement to assist with the part funding of its planned ongoing drilling program and development commitments in respect of the remainder of its Colombian asset portfolio and for general working capital purposes.

Luc Gerard, Executive Chairman of PetroLatina, commented, "I am extremely pleased to welcome Shell E&P Colombia as our partner in respect of the VMM-28 contract, who's deep and complex drilling capability and experience in conventional and non-conventional reservoirs will be invaluable. The farm-out agreement provides us with exposure to exploration activity on the VMM-28 block, including the technology and expertise of Shell, whilst enabling us to focus our resources on the development of the other promising assets in our Colombian portfolio, including the Putumayo-4 E&P block.

The funds received, following the receipt of ANH approval, will assist with the financing of our ongoing Colombian work program whilst we maintain the flexibility of exercising an option to participate in the promising VMM-28 block in the future. This agreement serves to demonstrate the level of industry interest in VMM-28 and more generally in Colombia. We continue to believe in the potential of both our asset portfolio and Colombia and look forward to demonstrating and realizing such potential as our work program progresses."

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Drilling Commenced at Pacific Rubiales' Colombia Well

- Drilling Commenced at Pacific Rubiales' Colombia Well

Monday, July 11, 2011
Petroamerica Oil Corp.

Petroamerica announced the July 3, 2011 spud of the Torodoi 1-X exploration well, targeting Tertiary and Cretaceous reservoir formations in the Arauca Block situated in the Llanos Basin of Colombia. The operator on the block, Pacific Rubiales, who holds a 95% participating interest in the block, will drill the well using the Petrex 22 drilling rig and is expecting to reach a total depth of 7,198 feet (measured depth) by early August, 2011. Shortly after completion of this well, it is expected that a second well on the Arauca Block will be spudded using the same rig.

Petroamerica, pursuant to a Farm-in Agreement with Pacific Rubiales, holds a 5% participating interest in the Arauca Block, but will be fully carried by Pacific Rubiales for the costs of both this and the second well.

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Colombia Well Delivers for Ecopetrol

- Colombia Well Delivers for Ecopetrol

Wednesday, July 06, 2011
Ecopetrol S.A.

Ecopetrol has proven the presence of hydrocarbons in exploratory well Fauno-1, located in the Municipality of Puerto Gaitan, in the Meta province (Colombia).

This well, part of the exploratory campaign carried out by the Company in the Cano Sur block in the Llanos Orientales, is in addition to three other wells in the same block that were previously announced as successful (Mito-1, exploratory; Mago-1, stratigraphic; Draco-1, stratigraphic).

Ecopetrol S.A. is the operator and owner of all the rights to the Cano Sur Hydrocarbon Exploration and Operation Contract that was signed with the National Hydrocarbon Agency of Colombia (ANH), which covers an area of approximately 611,343 hectares.

The Fauno-1 well results confirm the potential of the Cano Sur block, where the company is continuing with an exploratory campaign, which includes the drilling of more than 20 exploratory and stratigraphic wells in 2011.

The Fauno-1 well, located in the eastern sector of the block, was drilled vertically to a depth of 3,256 feet. Technical data indicates that the well was completed with an artificial lifting system using a progressive cavity pump (or PCP), and that the hydrocarbon accumulation is located in the basal sands of the Carbonera formation.

Production tests carried out show production to date of 12.3 degrees API crude oil (heavy), with an average flow of 170 barrels per day, and a water and sediment of 22%, leaving an average daily rate of 132 barrels of crude oil. In initial tests the well produced 695 barrels.

Production conditions and yield for the deposit discovered in Fauno-1 will continue to be evaluated during the coming weeks.

The Company believes the results obtained from this block and from others in the area confirm the importance of the Llanos Orientales for Ecopetrol's growth strategy, and for achieving the goals proposed by the Company in the coming years, which include reaching one million barrels in equivalent production in 2015.

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Colombia Oil Group Plans $80B Spend, Govt May Sell 10% -Executive

- Colombia Oil Group Plans $80B Spend, Govt May Sell 10% -Executive

Thursday, June 23, 2011
Dow Jones Newswires
LONDON
by Benoit Faucon

Colombia's Ecopetrol group of oil companies is planning to spend $80 billion through 2020 in a bid to produce 1.3 million barrels a day, a top Ecopetrol executive said Thursday.

Hernando Zerda, head of corporate strategy and business performance, said the government may also sell a 10% stake in Ecopetrol, the main shareholder in the group of oil companies mostly operating in the Latin American nation.

Speaking at the World National Oil Companies Congress here, Zerda said the companies of the Ecopetrol group are set for a total capital expenditure of $80 billion during 2011-2020.

The spending will help achieve a goal to produce 1.3 million barrels a day in the Ecopetrol companies--most of it in Colombia--in 2020, up from just above 700,000 barrels a day today, he said.

The majority of the financing will come from cash generation, but "sometime in the future, we will need to issue new shares" potentially representing 10% of the Ecopetrol capital "if prices are good," he said.

Separately, "the government is considering selling 10%" in Ecopetrol, the executive said.

But both considerations are "not confirmed," he said.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Canacol Kicks Off Drilling Program in Colombia

- Canacol Kicks Off Drilling Program in Colombia

Wednesday, June 22, 2011
Canacol Energy Ltd.

Canacol announced the start of its heavy oil exploration drilling program on its Tamarin and Cedrela Exploration and Production ("E&P") contracts located in the Caguan - Putumayo Basin in Colombia. The Corporation has 100% working interest and is operator of both contracts, which represent approximately 388,000 net acres. The Corporation plans to drill two stratigraphic wells, one on each of the Tamarin and Cedrela contracts, in a back to back drilling campaign that will commence in mid July 2011. This will be followed by the drilling of five conventional exploration wells, the first to start in late 3Q 2011, and the last to end midyear 2012.

Charle Gamba, President and CEO of the Corporation, commented "The stratigraphic wells will target two large structures recently defined by the new 2D seismic acquired on the Tamarin and Cedrela blocks. These wells, which can be drilled relatively inexpensively compared to conventional exploration wells, have the potential to yield useful information concerning the presence and type of oil, as well as basic reservoir thickness and quality information, in advance of the conventional exploration drilling program the Corporation plans to start in late 3Q 2011. Since the discovery of the Capella heavy oil field by Canacol and its partner in 2008, the Corporation has been able to leverage its proprietary knowledge of the geology and potential of the area. The Corporation is now positioned to execute a significant heavy oil exploration program in this emerging heavy oil play in Colombia."

Tamarin ESTR-1 Stratigraphic Well

The Tamarin ESTR-1 well is planned to be drilled to a depth of 3,260 feet measured depth ("ft md") and will target potential heavy oil bearing reservoirs in the Mirador sandstones, the main producing sandstones in the Corporation's Capella heavy oil field. The Corporation has a 100% working interest and is operator of the Tamarin contract, which represents 68,000 net acres and is located on trend approximately 25 kilometers to the southwest of the Capella heavy oil field.

The Corporation has executed a contract with LT Geoperaciones y Mineria Ltda., a service company that will provide the drilling rig. The Corporation anticipates that the well will take approximately 8 weeks to drill, core, and log. The information that the Corporation anticipates to collect include cores through the prospective reservoir intervals and a full suite of conventional openhole wireline logs. This data will yield information concerning the thickness, porosity, permeability, and fluid content of any prospective reservoir intervals that may be encountered within the well. Given the small size of the wellbore, the Corporation will be unable to flow test any of the prospective reservoirs.

The Corporation is currently constructing the surface location and anticipates that the Tamarin ESTR-1 will commence drilling in mid July 2011.

Cedrela ESTR-1 Stratigraphic Well

The Cedrela ESTR-1 well is planned to be drilled to a depth of 2,600 feet measured depth ("ft md") and will also target potential heavy oil bearing reservoirs in the Mirador sandstones, the main producing sandstones in the Corporation's Capella heavy oil field. The Corporation has a 100% working interest and is operator of the Cedrela contract, which represents 320,000 net acres and is located on trend approximately 50 kilometers to the southwest of the Capella heavy oil field.

The Corporation anticipates spudding the Cedrela ESTR-1 stratigraphic well after the drilling of the Tamarin ESTR-1 well has been completed. The Corporation anticipates that the Cedrela ESTR-1 well will take approximately 8 weeks to drill, core, and log. The same information that the Corporation plans to collect in the Tamarin ESTR-1 well will also be collected in the Cedrela ESTR-1 well.

Forward Plans

The two stratigraphic wells will provide useful information that will be used to pick the final surface locations for the five conventional exploration wells that the Corporation plans to drill back to back on the Tamarin, Cedrela, and Sangretoro contracts starting in late 3Q 2011. The Corporation anticipates that the program will conclude with the fifth well in 2Q 2012.

In the meantime, the Corporation advances its 2D seismic acquisition program on its Sangretoro contract. The Corporation has a 100% operated interest in the contract, which represents 385,000 net acres. Once the seismic is complete, the Corporation is prepared to drill additional stratigraphic wells for information purposes before drilling two conventional exploration wells by the end of 2Q 2012.

The conventional exploration wells will be drilled with a normal drilling rig, which will allow for any potential oil bearing reservoirs to be flow tested.

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Energy Sector Update: June 14, 2011

- Energy Sector Update: June 14, 2011



Jun 14, 2011

Energy shares are higher mid-day as the broader market is looking to regain lost ground. Light, sweet crude oil for July delivery traded up 1.5% to $98.78 a barrel. Cloud Peak Energy (NYSE:CLD), a U.S. coal producer, today, announced an agreement with Westshore Terminals LP to permit coal shipments through the Westshore Terminal in Vancouver, BC for ten years. Cloud Peak Energy exported 3.3 mln tons to Asian customers in 2010 through the terminal. The contract will commence in 2013 once the current contract ends, pending a definitive agreement between the parties.

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Colombia Aims to Put Caribbean Oil Exploration Back On Track

- Colombia Aims to Put Caribbean Oil Exploration Back On Track

Wednesday, June 01, 2011
Dow Jones Newswires
by Dan Molinski

Colombia hopes it can resolve before the end of the year environmental issues that have delayed an offshore oil exploration plan in the Caribbean Sea by Spanish oil major Repsol and Colombia's state-controlled Ecopetrol.

Armando Zamora, the head of Colombia's oil licensing agency ANH, told reporters Wednesday that it and the two oil companies hope to reach an agreement with community leaders on the Colombia-owned island of San Andres that would allow for exploration contracts to be signed for the Cayos 1 and Cayos 5 blocks.

Nonetheless, the Colombian government official warned that without final consent from the San Andres island community--which is concerned about the effects on coral reefs and the fishing community--oil exploration in the area west of Nicaragua might prove impossible.

"We're aspiring for a deal to be reached during this year," Zamora said. "But both we the government and the companies don't want to force anything on the island communities. If in the end the communities say 'no,' then it's going to be very difficult" to continue with exploration plans.

The two oil blocks were awarded to Repsol and Ecopetrol last year in a drilling round aimed at boosting production in Colombia's already-booming oil sector. Crude oil output in Colombia reached a record 903,000 barrels a day in April and the government hopes production will reach 1 million barrels a day by the end of 2011.

Colombia has been hoping the waters it owns near San Andres, far from mainland Colombia, could allow it to become an offshore oil driller for the first time. Drilling near mainland Colombia has so far proven to be more gas-prone than oil-prone, although exploration efforts continue in several areas, including the Tayrona block held jointly by Repsol, Ecopetrol and Brazil's state-run company, Petrbras.

An official at Repsol in Bogota confirmed Wednesday that it hasn't yet signed a contract for either the Cayos 1 block or the Cayos 5 block, and he said that until that were to happen the company can't make any comments.

The oil blocks are located in the Seaflower Biosphere Reserve, a marine protected area that reportedly contains 76% of Colombia's coral reefs and is a nesting site for sea turtles. For more than a decade the reserve has been part of the United Nation's network of biosphere reserves.

The plan to begin exploration in the two oil blocks was suspended earlier this year after local groups filed a lawsuit against ANH for awarding the blocks within a protected area before consulting first with fishermen and others in the area that could be affected.

Zamora said the ANH hopes to convince the communities over the coming months that oil exploration would be done in an environmentally friendly fashion, and that the projects could bring jobs and improve the economies for the island of San Andres and Old Providence, a smaller island that is part of the same archipelago and is also owned by Colombia.

The Colombian official said it is too early to estimate how much oil might exist in the area.

Copyright (c) 2011 Dow Jones & Company, Inc.

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C&C Energia Updates Ops in Colombia

- C&C Energia Updates Ops in Colombia

Monday, May 30, 2011
C&C Energia Ltd.

C&C Energia provided an operations update on its current activities in Colombia.

Llanos Basin

The Corporation in the past 60 days has completed drilling of five wells in the Llanos Basin, two development wells and three exploration wells. The Corporation currently produces 9,500 barrels of oil per day ("bopd") on two of its Llanos Basin blocks (Cravoviejo and Cachicamo).

On the Cravoviejo Block (100% working interest), the Corporation has recently completed the drilling and testing of the Carrizales-15 development well and the Cucaracha-1 and Heredia-1 exploration wells. The Carrizales-15 well was drilled to a measured depth of approximately 8,600 feet and encountered oil bearing sands in the Gacheta and Ubaque formations. The Carrizales-15 well is currently being tested in the Gacheta at 8,139 feet with the Ubaque sands to be tested at a later date. Pending successful testing and tie-in, the Corporation expects that the well will be brought on production within two weeks. The Cucaracha-1 exploration well was drilled to a measured depth of 8,929 feet. The well tested oil in the Ubaque formation at 8,632 feet and the well is currently undergoing a remedial cement work-over due to inadequate cement over the oil bearing interval and the underlying water bearing sandstone. The Corporation anticipates the well will be retested over the next two weeks to establish accurate production rates. The Heredia-1 exploration well, located in the northwest portion of the Cravoviejo Block, recently reached a total measured depth of 9,811 feet and was tested in several reservoirs utilizing a modular formation tester (MDT). Fluids and pressures were collected from the Ubaque, Gacheta, and Carbonera Formations in eight separate tests. Oil was recovered from two tests in the upper (8,370 feet) and middle (8,504 feet) C-5 sandstone reservoirs while the remaining tests recovered formation waters. The well is being cased and the Corporation anticipates that it will be completed in the two oil bearing C-5 sandstones over the next few weeks.

The Hoatzin-4 development well on the Cachicamo Block (100% working interest) was drilled to a measured depth of 6,634 feet and encountered two oil bearing reservoirs in the C7 (Carbonera Formation). The uppermost sand at 5,896 feet was completed and recently placed on production at 175 bopd of 26 degree API oil.

On the Pajaro Pinto Block (100% working interest), the Corporation's first exploration well, Asmodeo-1 was drilled to a measured depth of 10,529 feet and encountered good reservoir development with oil shows in the Mirador, Gacheta and Ubaque formations. However, it was determined that none of the intervals contained sufficient commercial quantities of oil and the well was plugged and abandoned. The Corporation has four remaining prospects on the Pajaro Pinto Block and plans to drill at least two of these prospects in early 2012.

Putumayo Basin

The Corporation has entered into a binding term sheet, subject to the finalization of definitive Farm-out Agreement and Joint Operating Agreements, for the farm-out of a portion of its working interest in the Coati and Andaquies blocks in the Putumayo basin in Colombia to Canacol Energy Ltd. (the "Farmee"). The Corporation has agreed to farm-out a portion of its working interest in the Andaquies Block in return for the Farmee paying the defined cost of acquiring additional 2D and/or 3D seismic and drilling one well on the block. Upon the Farmee meeting its obligations to pay 72% of the cost associated with acquiring seismic and drilling one exploration well it will earn a 36% working interest in the Andaquies Block and the Corporation's working interest will be reduced from 90% to 54%. The Corporation has also agreed to farm-out a portion of its working interest in the Coati Block in return for the Farmee paying the defined cost of acquiring additional 2D and/or 3D seismic and drilling one well on the block. Upon the Farmee meeting its obligations to pay 80% of the cost associated with acquiring seismic and drilling one exploration well it will earn a 40% working interest in the Coati Block and the Corporation's working interest will be reduced from 100% to 60%. C&C Energia will be the Operator on both blocks. Pending receipt of drilling permits and necessary regulatory approvals, C&C Energia intends to drill the initial test wells on these blocks in the fourth quarter of 2011.

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Ecopetrol Makes Oil Discovery in Colombia

- Ecopetrol Makes Oil Discovery in Colombia

Tuesday, May 17, 2011
Ecopetrol S.A.

Ecopetrol announced the discovery of crude oil in the Mito-1 exploratory well located in the municipality of Puerto Gaitan, in the Meta province.

The exploratory well (A-3) comprises part of the exploration campaign in the Cano Sur block in the Llanos Orientales, where the presence of hydrocarbons had already been reported at stratigraphic wells in 2010 (Mago 1 and Draco-1).

Ecopetrol is the operator and owner of all the rights of the Cano Sur Contract for Exploration and Exploitation signed with the National Hydrocarbon Agency (ANH – Agencia Nacional de Hidrocarburos).

The Mito-1 exploratory well is located in the Eastern sector of the Cano Sur Contract contiguous to the Quifa field, in which Ecopetrol also has a participation.

The Mito-1 well was drilled vertically to a depth of 3,310 feet, equivalent to more than one kilometer. It was then completed with an artificial lift system using a progressive cavity pump (PCP). The accumulation of hydrocarbons has been proven in the basal sands of the Carbonera formation.

The production testing conducted to date brings up a production of crude oil of 13.5o API, with an average flow of 225 barrels per day, a water cut on the order of 10%, and a daily average production of 200 barrels of crude.

In coming weeks the evaluation of the conditions for production and the behavior of the deposit discovered with the Mito-1 well will continue. Additionally, Ecopetrol will proceed with the drilling campaign within the Cano Sur block, which will encompass more than 10 exploratory wells, and additional stratigraphic wells in coming months.

This new finding reaffirms the importance of the Llanos Orientales in Ecopetrol's growth strategy. The Meta province represents about 40% of the company's crude production, and is one of the focal points of the exploratory campaign in its strategy leading up to 2020.

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Global Energy Commences Seismic Acquisition in Colombia

Global Energy Commences Seismic Acquisition in Colombia

Wednesday, April 20, 2011
Global Energy Development plc

Global Energy has begun planning the acquisition of 100 square kilometers of new 3D seismic over the Company's Bolivar Association Contract area.

The Company has previously reprocessed existing seismic over the contract area and made an exhaustive interpretation. The acquisition and interpretation of the new seismic data will enable the Company to validate the previous interpretation and establish the optimum position of the future wells scheduled to be drilled on the contract area.

Although the major structural elements of the block have been delineated using older vintage 2D seismic, the much higher resolution data gained from a 3D survey will identify the smaller features and ensure proper placement of lateral wellbores in the fractured reservoirs. Using the current "fairway" concept, it is necessary to locate the exact position of the various faults in order to identify areas of maximum natural fracture density. A portion of the 3D will be designed to image the Crisol gas cap, in order to determine the continuity and limits of that reservoir should the injection of associated gas become necessary in the future.

The Company has engaged Third Coast Enterpises, Inc. to aid in the design of an approximately 100 square kilometer 3D survey and is currently in the process of soliciting bids for selection of an acquisition company.

Once the design phase is finished and an acquisition company is selected, the Company plans to move to the permitting and acquisition phase of the projects which is expected to take approximately one to two months.

Repsol Adds to Hunt for Offshore Oil in Colombia

Repsol Adds to Hunt for Offshore Oil in Colombia

Thursday, April 07, 2011
Dow Jones Newswires

by  Dan Molinski

Colombia's state-controlled oil company Ecopetrol reached a deal with Repsol for the Spanish oil major to participate in two more offshore exploration projects in the Caribbean.

The deal will give Repsol a 50% stake in each of two oil blocks off Colombia's Caribbean coast, RC-11 and RC-12, Ecopetrol said in a statement late Wednesday. Ecopetrol will retain the other 50% stake in each and stay on as the operator of the blocks.

The deal must still be approved by Colombia's oil-licensing agency, ANH.

In January, Repsol took a 30% stake in another Caribbean offshore exploration block called Tayrona. Ecopetrol and the local unit of Brazil's state-run company, Petrobras, also have a stake in the Tayrona block.

Ecopetrol is Colombia's largest integrated oil and gas company, and it accounts for 60% of total production.

Colombia's oil sector is booming, and the government is hoping output will reach 1 million barrels a day by the end of the year.

Pacific Rubiales Acquires Maurel & Prom Stake in Colombia

Pacific Rubiales Acquires Maurel & Prom Stake in Colombia

Thursday, March 31, 2011
Pacific Rubiales Energy Corp.

Pacific Rubiales announced the acquisition of 50% of the interests held by Maurel et Prom in the Sabanero, Muisca, SSJN-9, CPO-17 and COR- 15 blocks, which are all located on-shore in Colombia.

Mr. Ronald Pantin, Chief Executive Officer of the Company, commented, "We are very pleased to join forces with Maurel et Prom. This acquisition adds significant resources and exploratory potential to our already robust resource base. Moreover, this acquisition fits synergistically with our other assets located in the same basins, paving the way to significant efficiencies in production and transport. With this acquisition we continue raising the bar as the premier explorer and operator in Colombia."
Upon completion of the transaction, Pacific Rubiales will partner with Maurel et Prom in respect of the following interests:

• 100% participation in the Sabanero Block ("E&P Contract No. 17 of 2007 Sabanero") located in the central region of Colombia in the Department of Meta.
• 100% participation in the Muisca Block ("E&P Contract No. 20 of 2008 Muisca") located in the central region of Colombia in the Departments of Boyacá and Cundinamarca.
• 50% participation in the SSJN-9 Block ("E&P Contract No. 47 of 2008 SSJN- 9") located in the northern region of Colombia in the Departments of Bolivar, Cesar and Magdalena. The remaining 50% interest is currently held by HOCOL.
• 50% participation in CPO-17 Block ("E&P Contract No. 40 of 2008 Llanos Orientales - Area Occidental CPO-17") located in the central region of Colombia in the Department of Meta. The remaining 50% interest is currently held by HOCOL.
• 100% participation in the COR-15 Block ("Special Technical Evaluation Agreement Type 3 Contract") located in the central region of Colombia in the Department of Boyacá.

This agreement is subject to legal and regulatory approvals of the ANH and certain contractual approvals with the partners in Colombia.
The general terms of the agreement with Maurel et Prom are as follows:

• Pacific Rubiales will pay to Maurel et Prom cash consideration to a maximum of US $66 million as a reimbursement for past exploration costs in the blocks, as at March 31, 2011.
• Pacific Rubiales will assume a full carried obligation on the exploration and delineation activities in the Sabanero Block with a reimbursement out of the free cash flow. The Company will also secure the financing required by Maurel et Prom to execute its portion of the development activities in such block.
• Reimbursement will also be made by means of free cash flow derived from future hydrocarbon production. Pacific Rubiales offers to assume a full carried obligation of up to US $120 million in three years for exploration activities in the SSJN-9, CPO-17 and Muisca Blocks. This obligation will be subject to revisions pending the activity results and negotiations with the other applicable partners.
• Pacific Rubiales will assume a full carry obligation on exploration activities for Block COR-15, with reimbursement by means of free cash flow derived from future hydrocarbon production. The Company will also secure the financing required by Maurel et Prom to execute its portion of the development activities in such block. Reimbursement will also be made by means of free cash flow derived from future hydrocarbon production.