CRUZSUR ENERGY PROVIDES AN UPDATE ON LLANCANELO ASSET
VANCOUVER, B.C., February 13, 2019 –CruzSur Energy Corp. (the “Company” or “CruzSur”) (TSXV: CZR), provides an update on the Llancanelo asset and its reduction of liabilities, with YPF S.A. (“YPF”), the operator of the concession.
The Company has arrived at a settlement agreement with YPF whereby YPF will cancel the outstanding liabilities of CruzSur associated with the Llancanelo block and CruzSur has agreed with YPF to return its 39% working interest in the Llancanelo block. This will result in a significant reduction of liabilities from the Company’s balance sheet, as described in the Company’s latest MD&A on SEDAR and the Company’s website, including cash calls assumed on acquisition as well as consideration payable on acquisitions as related to YPF and the Llancanelo portion of decommissioning obligations.
YPF will assume all rights and obligations relating to the 39% participating interest which CruzSur purchased through two transactions that occurred in 2017. The Farm-in agreement that CruzSur entered into with YPF to earn 11% working interest, in which CruzSur would contribute $54M USD of capital and pay $12.5M USD to earn 11% working interest will be canceled. YPF will release and hold harmless the Company from any and all commitments, damages or penalties related with this cancelation.
The Company will now work with YPF to obtain approval from the Province of Mendoza for the assignment of its participating interest to YPF. The Company is pleased to find a solution to the Llancanelo asset and looks forward to working with YPF to finalize this transaction.