Curamhuele Extension of Milestones Centaurus Energy Inc. Announces Entering into Agreement with Province of Neuqun for Extension of Curamhuele Milestones
Buenos Aires, Argentina--(Newsfile Corp. - January 21, 2020) - Centaurus Energy Inc. (TSXV: CTA) (OTCQX: CTARF) ("Centaurus" or the "Company") is pleased to announce that the Company has entered into an agreement with the Ministry of Energy and Natural Resources of the Province of Neuqun (the "Ministry") to adjust the milestone schedules for the Company's drilling obligations in its Curamhuele concession.
Centaurus has a 90% working interest in the Curamhuele concession covering approximately 51,000 net acres. The concession is prospective for liquids in the Lower Agrio formation and gas and condensate in the Vaca Muerta formation.
As previously announced, the Company received a letter from the Ministry on November 14, 2019 stating that the milestones for the vertical tests that were agreed as part of the 2 year extension were not being met, that the Company was in discussion with the province regarding adjustments to the milestone schedule, and failure by the Company to meet this commitment or to adjust the milestone schedule could result in the termination of the concession and the Company being responsible for approximately USD$8 million dollars of investment commitment obligations.
Following receipt of the letter, the Company engaged in discussions and correspondence with the Ministry and Gas y Petrleo del Neuqun S.A. ("GyP"), a provincial government oil and gas company who as a 10% working interest in the concession, for the purpose of adjusting the milestone schedule.
On January 10, 2020, the Company received a letter from the Ministry which proposed an agreement to adjust the milestones and provide the Company until April 30, 2020 to determine a specific financing to comply with the schedule, conditional upon the Company submitting (within 72 hours of signing the agreement) a performance bond for a value equal to three thousand two hundred and thirty (3,230) technical units, being US$16,150,00. The bond shall be executed if (i) the Company fails to comply with the terms of the extension, including submission of contracts, invoices or other evidence that the Company has contracted a drilling rig and has secured the wellhead and all casing necessary; or (ii) the March 9, 2021 deadline for completing the commitments.
The Company accepted the Ministry's proposal on January 20, 2020 and is now in the process of securing the performance bond. Financing solutions are being evaluated by an independent committee of directors appointed by the Company's board, as previously announced on November 25, 2019.