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Petroamerica streamlines its Colombian exploration portfolio

^{Published on 2011-09-27 16:23:46 - Market Wire}
 

CALGARY, Sept. 27, 2011 /CNW/ - Petroamerica Oil Corp. (TSXV: PTA) ("Petroamerica" or the "Company") announces that it has made a number of adjustments to its exploration portfolio in Colombia. These include increasing the Company's final participating interest in the El Eden block from 25% to 40% and withdrawing from the El Sancy block. Petroamerica's final participating interest share in the El Eden block followed a two-step process.

The Company will increase its participating interest share of the El Eden block from 25% to 75%. The additional 50% participating interest, formerly held by another party that is in the process of withdrawing from the block, is derived from an incremental participation agreement (the "Agreement") signed with Talisman Oil & Gas Colombia ("Talisman").  The transfer to Petroamerica of its initial 25% participating interest (announced January 4, 2011), the withdrawal of the other party and the subsequent transfer of the incremental 50% participating interest to Talisman and then to Petroamerica, are all subject to approval by the Colombian National Hydrocarbon Regulatory Authority ("ANH"). The incremental 50% participating interest comes at no additional cost to Petroamerica.

Petroamerica has agreed to farm out a 35% participating interest in the El Eden block (the "Farmout"), excluding the Chiriguaro oil discovery, to Parex Resources Colombia Ltd. Sucursal ("Parex"). Under the terms of the Farmout, Parex will pay Petroamerica a consideration of US$ 3.5 million and will fund the first 65% of an exploratory commitment well to be spud before June 9, 2012.  The transfer of the 35% participating interest to Parex is subject to approval by the ANH and Talisman.

Following the Agreement and the Farmout, if all the approvals are forthcoming the participating interest breakdown for the El Eden block, excluding the Chiriguaro oil discovery, will be Petroamerica 40%, Parex 35% and Talisman 25%. For the Chiriguaro discovery area, Petroamerica and Talisman will each hold a 50% participating interest share.

Petroamerica has also relinquished its 50% participating interest contractual rights to the El Sancy block at no cost to the Company.

Petroamerica is committed to optimizing its Colombian exploration portfolio, with the objective of strengthening its balance sheet and focusing the company on the highest potential blocks capable of delivering near-term value.

Petroamerica is a junior oil and gas company operating in Colombia and its shares are listed on the TSX Venture Exchange under the symbol "PTA". 

Forward Looking Statements:

This news release includes information that constitutes "forward-looking information" or "forward-looking statements".  More particularly, this news release contains statements concerning expectations regarding the Agreement and the Farmout and its expectations regarding the results of the operations thereof, in addition to the potential exploration and development opportunities associated with such arrangements and expectations regarding regulatory approval and the strategic direction of the Company.  The forward-looking statements contained in this document, including expectations and assumptions concerning the obtaining of the necessary regulatory approvals, including ANH approval, and the assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are uncertain and subject to risks. A multitude of factors can cause actual events to differ significantly from any anticipated developments and although the Company believes that the expectations represented by such forward-looking statements are reasonable, undue reliance should not be placed on the forward-looking statements because there can be no assurance that such expectations will be realized. Material risk factors include, but are not limited to:  the inability to obtain regulatory approval, including ANH approval, for the transfer of participating, the risks of the oil and gas industry in general, such as operational risks in exploring for, developing and producing crude oil and natural gas, market demand and unpredictable shortages of equipment and/or labour; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; fluctuations in oil and gas prices, foreign currency exchange rates and interest rates, and reliance on industry partners. 

Neither the Company nor any of its subsidiaries nor any of its officers, directors or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does any of the foregoing accept any responsibility for the future accuracy of the opinions expressed in this document or the actual occurrence of the forecasted developments.

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.

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.