Sintana Energy Inc. (TSX-V: SNN) ("Sintana" or the "Company") is pleased to announce that Patriot Energy Oil & Gas Inc. ("Patriot"), wholly-owned by the Company, has entered into an amendment to the Hydrocarbon Exploration and Production Contract for the VMM-37 Block (the "Contract") with the Agencia Nacional de Hidrocarburos of Colombia (the "ANH") and ExxonMobil Exploration Colombia Limited, a wholly owned subsidiary of Exxon Mobil Corporation ("ExxonMobil").
The amendment which was approved on April 3, 2013 allows Patriot to assign seventy percent (70%) of the participating interest, rights and obligations and the operation of the Contract to ExxonMobil for the exploration and development of unconventional oil and gas resources underlying the 43,000 acre VMM-37 Block in Colombia's Middle Magdalena Basin.
Patriot will retain the remaining 30% participating interest in the unconventional resources as well as its current 100% participation interest in the conventional resources overlying the top of the unconventional interval.
MAJOR ELEMENTS OF THE VMM-37 WORK PROGRAM: - ExxonMobil will pay 100% of all Exploration Phase I well costs (3 wells). The estimated timing for the commencement of drilling operations on the first exploration well is in the third quarter of 2013. A consideration will be paid that will compensate Sintana for past expenses connected with the block. Work Program warranties to meet ANH requirements will become the responsibility of ExxonMobil.
- ExxonMobil will have an option to proceed to the next phase of the unconventional project. In this Development Phase, it will pay 100% of the additional costs to a maximum of US $45 million, of which US $10 million will be recouped by ExxonMobil from 50% of Patriot's production proceeds.
Sintana's CEO, Doug Manner, commented, "Now that we have ANH approval of the VMM-37 Contract amendment, ExxonMobil will complete the well design for the initial exploration well and prepare for drilling operations. We have a highly prospective unconventional project, an unsurpassed partner and a dedicated, highly skilled technical team. Additional details of the upcoming VMM-37 drilling program will be announced as they become available."
ABOUT SINTANA ENERGY
The Company is primarily engaged in petroleum and natural gas exploration and development activities in Colombia and Peru. The Company's exploration strategy is to acquire, explore, develop and produce superior quality assets with significant reserve potential.
The Company's private participation interests in Colombia include 100% of the conventional and 30% of the unconventional in the 43,158 acre VMM-37 Block, located in the Middle Magdalena Basin. A 30% private participation interest in the 58,570 acre Talora Block, 30% in 272,021acres in the COR-39 & COR-11 Blocks and 25% carried private participation interest in the 154,909 acre VMM-4 and the 59,522 acre VMM-15 Blocks all located in the Upper Magdalena Basin. In the Llanos Basin, the Company has a carried 25% private participation interest in the 11,624 acre LLA-18 Block. In the Sechura Basin, Peru the Company has a 25% interest in the 175,000 acre Bayovar Block XXVII. These interests are subject to all applicableregulatory and governmental approvals, including those of Colombia's National Hydrocarbon Agency (ANH). The Company continues to evaluate a portfolio of exploration opportunities in South America.
On behalf of Sintana Energy
"Doug Manner" Chief Executive Officer
For additional information or to receive timely updates about Sintana's South America projects and recent corporate activities please visit the Company's website at www.sintanaenergy.com or email email@example.com.
Forward-Looking StatementThis news release includes forward-looking statements related to the expected occurrences in relation to the properties identified. A multitude of factors can cause actual events and results to differ significantly from any anticipated development and although the Company believes that the expectations represented by such forward-looking statements are reasonable at the time of preparation; there can be no assurance that such expectations will be realized in whole or in part. These forward looking statements are based on assumptions that the Company has made concerning the oil and gas industry in South America, that all applicable regulatory approvals will be obtained, the reliability of available data regarding the properties and increasing demand for oil and gas. Risk factors which may cause actual results to differ from those anticipated in such forward looking statements include but are not limited to, the risk that ExxonMobil may opt to withdraw from the VMM-37 project at various stages of the work program, risks associated with the uncertainty of exploration results and estimates, currency fluctuations, the uncertainty of conducting operations under a foreign regime, exploration risk, the uncertainty of obtaining all applicable regulatory approvals, the availability of labour and equipment, the fluctuating prices of oil and natural gas, the availability of financing and the Company's dependence on Sintana's management personnel and other participants in the property areas, including ExxonMobil. Neither the Company nor any of its subsidiaries nor any of its officers or employees guarantee that the assumptions underlying such forward-looking statements are free from errors, nor do any of the foregoing accept any responsibility for the future accuracy of any of the opinions expressed in this document or the actual occurrence of forecasted developments.
Undue reliance should not be placed on these forward-looking statements as there can be no assurance that such expectations will be realized. The forward-looking statements contained in this document are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. This press release does not constitute an offer to sell or a solicitation to buy any of the securities of Sintana Energy Inc. in the United States.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Douglas Manner Chief Executive Officer Tel: 832.279.4913
Corporate Contact :Sean AustinVice President Tel: 713.825.9591
Source Sintana Energy Inc.