KEYFACT Energy
CruzSur Energy Corp. has appointed Ronald Pantin as Executive Chairman of the Company and has signed a Memorandum of Understanding with Panacol Oil & Gas Corp. to jointly develop assets of CruzSur in Colombia and Argentina. Initially, Panacol will emphasize its efforts on the E&P Contract for the Sinu 9 (SN-9) Block.
Ronald Pantin was the Chief Executive Officer and Executive Director of Pacific Exploration & Production, the prime independent oil company in Latin America, until November 2016.
Pantin worked in the Venezuelan oil industry for twenty-three years where he held numerous top level positions at Petróleos de Venezuela (PDVSA), including President of Corporacion Venezolana del Petroleo, President of PDVSA Exploration and President of PDVSA Servicios.
The agreement details are as follows:
- Panacol will be responsible for the project management of the activities carried out by CruzSur in its different blocks located in Colombia and Argentina following the guidelines of the Board of Directors of CruzSur.
Specifically with SN-9 E&P Contract:
Panacol will capitalize US$2.4 million contributed by Flamingo Oil S.A.
Procure all the activities necessary to obtain the required licenses, amend the obligations of the contract, operate the SN-9 Block, negotiate and finalize the JOA with Cleanenergy Resources SAS.
Panacol is responsible to negotiate with petroleum services providers who will be in charge of performing the required seismic, roads/infrastructure and drilling services estimated at US$22 million.
Both Panacol and Flamingo Oil S.A. will receive 2,800,000 shares each, and Landsons Investment Corporation will receive 1,200,000 shares for obtaining the Environmental & Social Licenses and related services.
Petroleum service providers will receive an estimate of US$22 million as follows: US$12 million as a non-recourse vendor financing to be paid out 50% of CruzSur’s production share in the SN-9 Block (50% of 72% = 36%) and US$10 million by another service provider that will be negotiated at an operating tariff.
Additionally, in Argentina, CruzSur reached an agreement with Compañía Argentina de Comodoro Rivadavia Explotación de Petróleo – CACR and resolved the liabilities regarding KM 8 as follows:
- Patagonia Oil Corp. sold and transferred its participation in San Jorge Oil Inc, (which represented 100% of the shares of the company) to Topland Industrial Ltd. The selling price is US$100,000 which was paid by the buyer by his acceptance and assumption of all the debts and liabilities of CRI Holding Inc. Sucursal Argentina, the Argentinean branch of the Company.
- As of August 16th, a bilateral rescission of the Purchase and Sale Offer of February 2, 2017 between CACR andFrontier Hydrocarbons Ltd., which rights and obligations were later yielded to Alianza Petrolera Argentina S.A. was reached, regarding property on lands located in the province of Chubut, and wells “Sol de Mayo”, “San Jorge”, “German Burmeister” and “George Stephenson”, (“the Wells”) as well as equipment and installations located on such grounds. With this agreement, CACR will withdraw all legal action processed against Alianza Petrolera and that is currently ongoing before the Civil and Commercial Court No.2 of Comodoro Rivadavia.
- Following this rescission, the Company received a 10% overriding royalty of production of the Wells for a period of 10 years, and where Patagonia Oil Corp. granted a purchase option to CACR on this royalty for an exercise period of one year for US$100,000. The overriding royalty will be effective as of January 1, 2020 and will be calculated over 100% of production of the Wells, which are currently active.
Serafino Iacono, CruzSur CEO commented:
“We are pleased to announce these two agreements which will allow the company to focus on our exploration and production opportunities. CruzSur looks forward to working together with Panacol to successfully operate blocks in Argentina and Colombia which we are confident, have tremendous potential.”
Ronald Pantin also stated,
“We are very pleased with this agreement. The company’s focus in Colombia will be in the development of its large base of natural gas resources, taking advantage of the high price environment, due to the steep decline of traditional sources of natural gas in the region. In Argentina, the target is to develop the important resources of low sulfur heavy oil that the Company has and where management have proven expertise.”