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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Mediterranean O&G Farms-Out Malta Stake

- Mediterranean O&G Farms-Out Malta Stake

Friday, June 24, 2011
Mediterranean O&G plc

Mediterranean O&G announced that Phoenicia Energy, a wholly owned subsidiary of MOG, has entered into an Execution Agreement with Dominion to farm-out a 75% operated working interest in the production sharing contract for Blocks 4, 5, 6 and 7 of Area 4 Offshore Malta, pursuant to a draft farm-in agreement. Completion of the Maltese Acquisition is conditional upon (i) receipt of required Maltese government approvals and (ii) completion of the placing of shares by Dominion, announced on 24 June, 2011 ("Dominion Placing").

Under the Execution Agreement, Dominion will pay a deposit of US $225,000 to PEL, which is non-refundable in the event that the Dominion Placing does not complete, or Dominion is otherwise unable to enter into the farm-in agreement. Should the Maltese government approvals not be received, the deposit is refundable in its entirety.

The Maltese PSC is situated to the north of Libya, covering an area of 5,715 km2 in Maltese waters. It includes both the Cretaceous rift potential of the Melita-Median Graben and the confirmed Eocene carbonate play of North Africa. A competent person's report on Area 4, completed by RPS Energy and prepared for MOG in March 2006, identified a number of prospects within the area. Of particular interest is the Tarxien prospect, a lower Eocene carbonate build up. Using Libyan oil field analogues, RPS estimated the prospect to have a gross recoverable un-risked P50 prospective oil resource of 115mmbbl with an 18% chance of success.

Under the Maltese PSC, MOG currently holds a 90% operated working interest through its subsidiary PEL, with Leni Gas & Oil Investments Limited holding the remaining 10% of working interest. Following the completion of the Maltese Acquisition and the subsequent farm-in agreement, Dominion will hold a 75% operated working interest in the Maltese PSC. Under the terms of the farm-in agreement, Dominion will meet certain exploration costs up to a cap of US $1,260,000, on behalf of MOG in relation to its remaining 15% working interest. Dominion will also compensate MOG for a total amount of US $900,000 in certain historic costs, through the US $225,000 deposit mentioned above and a closing sum of US $675,000 under the farm-in agreement.

The work obligations of the current period of the Maltese PSC comprise the acquisition of 1,000km2 of 3D seismic data and the drilling of one exploration well. The results of the seismic survey will enable the JV partners to define and evaluate the Tarxien prospect and other identified opportunities within Area 4, prior to any drilling decision. The long-offset 3D will also allow for a clearer analysis of the pre-tertiary rift-fill below the Eocene carbonates and potential Cretaceous targets.

The first exploration period runs until January 2013 and there is a minimum spend requirement of US $5 million. The Company anticipates that the 3D seismic survey will cost between approximately US $8 million and US $10 million gross to undertake, which will satisfy the minimum spend requirement.

Michael Bonte Friedheim, the Company's CEO, stated, "Following agreement with the Government of Malta to extend the exploration phase for all blocks of Area 4, for 18 months, we are very pleased to have concluded the terms for a farm out with Dominion.

While this remains conditional, the farm out agreement allows us to be practically free-carried for the completion of a 1,000 sq km long-offset 3D seismic survey, as well as receive a significant reimbursement of back costs. Dominion has extensive experience in frontier exploration activities and we are glad to have them as a partner.

We are hopeful that the seismic survey will identify further prospects in the area and make the drilling of an exploration well attractive."

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Donnybrook Farms-Out Alberta Lands to Cequence

- Donnybrook Farms-Out Alberta Lands to Cequence

Wednesday, June 22, 2011
Donnybrook Energy Inc.

Donnybrook reported that it has finalized an agreement with Cequence whereby Cequence will cash equalize into certain lands totaling 5 sections that Donnybrook currently holds 100% at Simonette, Alberta.

In return, Cequence, as operator, will commit to the drilling of a Test Well on a nearby jointly held section (50% Donnybrook/50% Cequence) with Cequence paying 70% of the drill and complete costs to earn a 50% working interest at tie-in point. Donnybrook will pay 30% of the drill and complete cost to retain a 50% working interest in the subject well which is expected to spud on or around August 1, 2011.

Initially, the Test Well will be drilled as a strat test into the Montney formation and if successful it will then be drilled horizontally for approximately 1,400 meters.

This well will be the first of three Montney horizontal multi-stage frac locations contemplated to be drilled between August and December of 2011 on Donnybrook's 50% lands at Simonette.

At Bigstone, Alberta, Donnybrook, as operator, has received the license for the drilling of its Montney horizontal well (25% BPO/50% APO) with a horizontal length of approximately 1,400 meters. Donnybrook has begun well site construction and the well is expected to spud early in the third quarter of 2011. The well is located within five miles of a recently announced liquids rich natural gas two mile horizontal Montney well that after clean-up reportedly flowed on test over the last day at an average rate of 13.1 MMCF of natural gas and 650 barrels of crude oil and NGLs per day (2,800 boe per day). Donnybrook and its partners hold 7 contiguous sections of Triassic Montney P&NG rights at Bigstone.

The wet spring weather in the area of Donnybrook's operations has delayed the Company's ability to access the DEI Hz 13-27 well at Resthaven which was drilled in the first quarter of 2011 and completed in April. The DEI Hz 13-27 well in which Donnybrook has a 70% working interest is still pending tie-in to the Conoco Phillips plant which will occur as soon as conditions permit. Once the well is tied-in it will be flowed back for an in-line production test. It is reasonable to expect that this may occur by mid July 2011.

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AsherXino Farms-Out Stake Offshore Nigeria

- AsherXino Farms-Out Stake Offshore Nigeria

Wednesday, June 15, 2011
AsherXino Corp.

AsherXino has executed formal documents with a leading international oil service company for US $10,000,000 in relation to the farm-out of an 8% working interest in its Nigeria offshore concession.

This transaction follows an additional farm-out for US $7,500,000.

AsherXino had previously entered into a farm-in agreement for a 40% working interest in the Nigeria offshore concession, upon payment of a required signature bonus of US $12,500,000 to the Nigeria government. The remaining 60% of the concession is held by the Nigeria local partner in compliance with the Nigeria local content law.

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