President Petroleum SA has conditionally agreed to acquire a 100% interest in the exploration contract covering a block known as Angostura in Rio Negro Province, Argentina, from Cia. General de Combustibles SA (CGC).
The 384-sq-km block is directly west of the President Energy subsidiary’s Las Bases concession.
The Angostura block produces 2.8 MMscfd of natural gas and 50 b/d of oil. The gas is compressed and dehydrated on the block then carried by pipeline to President’s Las Bases for connection to a pipeline operated by the company.
Rio Negro Province must approve the assignment, under which President will pay nothing but will assume liabilities and commitments along with income.
The first phase of the exploration contract expires in November, but President can request a second exploration period with a 15% royalty over production in the exploration phase.
The royalty will decline to 12% if the contract is converted into a 25-year exploitation concession. The provincial energy company then would take a 20% interest with a deferred carry.
CGC agreed to invest $1.825 million in President if the acquisition is completed by subscribing to new ordinary shares, to be purchased with a $500,000 initial investment followed by seven quarterly instalments.
