SEPT-18-2012: PRE JV WITH KAROON IN BRAZIL While the news is about 10 days old - this is another example of how PRE is moving forward with their other JV partners. We have seen similar arrangements with BPZ in Peru and now with Karoon in Brazil.
Recall the deal with BPZ (from earlier post, https://www.stockhouse.com/bullboards/messagedetail.aspx?s=OYL&t=LIST&m=31388359&l=0&pd=0&r=0) PRE is contributing$362M in exchange for 49% interest in the Z-1 block offshore Peru.
Now, in this recent deal involving PRE and Karoon - PRE will acquire a 35% net working interest in exploration blocks: S-M-1101, S-M-1102, S-M-1037 and S-M-1165, and also has as an option to acquire a 35% interest in SM-1166. In consideration for acquiring the interests in the Karoon Blocks, PRE will pay Karoon U.S. $40 million in cash as consideration for the assignment and fund up to U.S. $210 million in carried well costs - a total commitment of U.S. $250 million.
The mean (average) independent resource assessment of the 8 prospects Karoon has identified on their Brazillian blocks is 1.36 boe. The mean (average) independent resource assessment for CGX's Eagle Deep alone is 2.5 boe. Needless to say, both the size and resource prospectivity of CGX assets offshore Guyana are considerably larger in comparison.
So, something to keep in mind when trying to anticipate what king of arrangement could be worked out with CGX and PRE. PRE has clearly demonstrated with these recent transactions they are willing to throw down the cash in order to capture and move forward their international ventures.
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https://www.pacificrubiales.com/2012/447-18092012-pacific-rubiales-announces-agreement-to-acquire-a-35-net-working-interest-in-karoon-blocks-in-the-santos-basin-offshore-brazil
Toronto, Canada, Tuesday September 18, 2012 – Pacific Rubiales Energy Corp. (TSX: PRE; BVC:
PREC; BOVESPA: PREB) announced today that it has reached an agreement with Karoon Gas Australia
Ltd. (ASX: KAR) (“Karoon”) to acquire a 35% net working interest in the following exploration blocks:
S-M-1101, S-M-1102, S-M-1037 and S-M-1165, and also has as an option to acquire a 35% interest in SM-
1166 (collectively, the “Karoon Blocks”). In consideration for acquiring the interests in the Karoon
Blocks, the Company will pay Karoon U.S.$40 million in cash as consideration for the assignment and
fund up to U.S.$210 million in carried well costs.
Ronald Pantin, Chief Executive Officer of the Company, commented: “This acquisition will represent a
significant step forward in our plans to transform the Company for the future. It is an exciting exploration
opportunity, is an excellent fit with the Company’s strategy to target large resource capture in high
potential basins and positions us well to expand further into Brazil. With these new assets, Pacific
Rubiales will increase its presence in South America and enter into one of the most prolific oil rich
hydrocarbon basins in the western hemisphere, building on our successful technical and project
management record.”