Veraz Petroleum announces partner on Block 126 and funding of commitments for next phase of exploration
Veraz Petroleum Ltd. announce that it has partnered with Petrominerales Ltd., a 76% owned subsidiary of Petrobank Energy and Resources Ltd., a Colombian based exploration and development company to jointly explore the concession on which Veraz is currently conducting activities in the Ucayali Basin of east central Peru (“Block 126″).
Under the transaction, Petrominerales will pay consideration of CDN $11.9 million (U.S. $9.5 million) and Petrominerales will fund 45% of the estimated CDN$17.6 million (U.S. $14 million) exploration program to receive a 45% undivided interest in Block 126. Petrominerales will be designated the operator of Block 126, however Veraz will continue to manage operations on Block 126 through the completion of the Environmental Impact Assessment and seismic program.
The consideration for the transaction will be paid through a cash payment of CDN $626,900 (U.S. $500,000) and a loan facility of CDN$11,284,200 (U.S. $9,000,000). The loan facility will be available to Veraz upon completion of the Environmental Impact Assessment and Perupetro’s formal recognition of Petrominerales as a partner to the Exploration License Contract, and will be used to fund ongoing operations and the exploration program. The loan is secured by the shares of a wholly owned subsidiary of Veraz, and will be forgiven after the completion of the seismic program if Petrominerales chooses to continue as a partner in Block 126. Should Petrominerales choose not to continue as a partner in Block 126 Veraz will have the right to either pay out the loan or convert it to common shares.
“Petrominerales is an excellent strategic partner for Veraz and we look forward to utilizing their expertise in South America. This transaction gives Veraz the funds needed to complete the next phase of our development on Block 126 and to high grade the numerous drilling opportunities already identified,” states Oppe Cosijn President and CEO of Veraz.
The closing of the transaction is subject to the consent of Perupetro S.A..
Veraz is a Calgary-based junior resource exploration company focused on international oil and gas exploration and development activities.
