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Jan 08, 2009 17:00 ET
Argenta Finalizes Loma El Divisadero 20% Farm-Out for US$3.5 Million
TORONTO, ONTARIO--(Marketwire - Jan. 8, 2009) -
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Argenta Oil & Gas Inc. ("Argenta") (TSX VENTURE:AZA) is pleased to announce that the Company has finalized its farm-out agreement for a 20% working interest in the Loma El Divisadero property with Unitec Energy, an Argentinean based private company as initially reported in a press release dated July 16, 2008. The terms of the agreement provide for Unitec to pay the Company US$3.5 million, $500,000 of which will be paid in cash and the $3 million balance to be allocated towards the cost to drill two wells. Once this is completed, Unitec will have an option to acquire an additional 30% working interest and the operation of the Loma El Divisadero property by investing an additional US$3.3 million in additional wells and development costs. Unitec will also pay Argenta production bonuses calculated on cumulative gross production target commencing at US$1.1 million when 4.4 million barrels of oil equivalent production has been achieved, and up to a total of US$7.5 million when an additional 4.0 million barrels of oil equivalent production has been achieved, producing a cap at cumulative production of 8.4 million barrels of oil equivalent.
Daniel Gordon, Vice President, Corporate Development stated:
"Unitec is very enthusiastic about the upside potential of the Loma El Divisadero Block. The farm-out sets an estimated value for the Loma Block of approximately US$17.5 million. Spudding of the first well is anticipated in late February and in the interim, the Company will commence preparatory site work and materials acquisition."
Claudio Larotonda, President stated:
"This is a very significant step in the development of Argenta's assets, allowing us to prove the concept of the Loma field and providing the resources to develop production with no initial cash outlay by Argenta. The partnership with Unitec, part of the Eurnekian Group, adds significant strength to Argenta's ongoing activities in Argentina."
Unitec Energy, based in Buenos Aires, Argentina is part of the Eurnekian Group, a very large Argentine investment company with interests in various industries, including Bioenergy, Media, Airport and Highway Concessions, Tourism, Construction and Beverages amongst others.
In other news, Argenta is pleased to announce the appointment of Andres Tinajero as Chief Financial Officer of the Company. Andres possesses 15 years of business experience in corporate accounting and finance. He has held industry positions for companies ranging from $10 million to more than $3 billion in annual revenues as a CFO and controller. Andres' industry experience includes oil and gas, mining, cement, franchising, not-for-profit, and construction materials. He holds degrees in Business Administration and an MBA, and is also a Member of the Canadian Institute of Certified Management Accountants. Mr. Tinajero will be based in the Company's head office in Toronto, Canada. Mr. Colin Grant has stepped down as interim CFO and will continue as Treasurer of the Company.
Argenta Oil & Gas is a Canadian energy resource company with oil and gas assets in the Neuquen Basin of Argentina and in Colombia's Lower Magdalena Basin. Argenta owns and operates all of its assets. The Company is focusing on low risk development for growth and is currently pursuing a number of opportunities.
For further information on Argenta Oil & Gas, please visit the Company's website at www.argentaoilandgas.com.
This press release includes "forward looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of Management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Such risks and uncertainties include, but are not limited to, risks associated with the oil and gas industry (including operational risks in exploration development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of Argenta Oil & Gas Inc. to obtain all permits, consents or authorizations required for its operations and activities; and health safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the ability of Argenta Oil & Gas Inc. to fund the capital and operating expenses necessary to achieve the business objectives of Argenta Oil & Gas Inc., the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international business activities, as well as those risks described in public disclosure documents filed by Argenta Oil & Gas Inc. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in securities of Argenta Oil & Gas Inc. should not place undue reliance on these forward-looking statements. Statements in relation to "reserves" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future.