PetroFalcon to buy Lundin Petroleum subsidiary

PetroFalcon has agreed to buy Lundin Latina de Petroleos—the wholly owned Venezuelan subsidiary of Swedish firm Lundin Petroleum—for $41 million in a cash-stock transaction.

Jul 24th, 2007

By OGJ editors
HOUSTON, June 24 -- PetroFalcon Corp. which has oil and gas operations in Venezuela through its wholly owned Caracas subsidiary Vinccler Oil and Gas, has agreed to buy Lundin Latina de Petroleos SA, Caracas—the wholly owned Venezuelan subsidiary of Swedish firm Lundin Petroleum AB—for $41 million in a cash-stock transaction.

Following these transactions, Lundin Petroleum will become the largest shareholder in PetroFalcon, holding 42.5% of the shares.

Lundin plans to have two representatives on the board of PetroFalcon, a Venezuelan company. Lundin Petroleum is a Swedish independent oil and gas company with assets in Europe, Africa, Russia, and the Far East.

PetroFalcon will issue about 64 million shares to Lundin Petroleum, and PetroFalcon will receive Lundin Venezuela's 5% interest in the Baripetrol joint venture in Venezuela, as well as $30 million in cash from the acquisition and private placement.

Baripetrol operates the Colon unit in western Venezuela and has daily gross production of 10,500 b/d of oil and 5 MMcfd of gas.

The agreements are subject to the negotiation of a sales agreement and to all required regulatory approvals, including the approval of the Venezuelan Ministry of Energy and Petroleum.

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