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Solana Resources Limited ("Solana" or the "Company") Announces Asset Consolidation & Disposition
Solana Resources Limited ("Solana" or the "Company") Announces Asset Consolidation & Disposition.
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[{"type":"text","content":"\n\n\n\nCALGARY, Feb. 8 /CNW/ - Solana Resources Limited (TSX-V: SOR; AIM: SORL)\nis pleased to announce the consolidation of its Colombian asset portfolio\nthrough the disposal of 100% of its rights and obligations under an\nExploration Participation Agreement (the \"EPA\") to Ramshorn International\nLimited (\"Ramshorn\") signed February 8, 2007 but having effect from December\n1, 2006. With the agreement, Ramshorn will reacquire 100% of the EPA assets\nwhich includes the five Colombian oil and gas exploration prospects, \nGuayabillas, Puma, Guariquies, Alamo and Zeus.\n\n\nConsolidation Drivers\n\n\nPursuant to a recent management initiated strategic review of Solana's\nwide ranging asset portfolio, the Board of Directors reconfirmed its\ncommitment to Colombia and identified a number of high value assets to be the\nstrategic focus of the business. These higher value assets represent the best\nrisk/reward ratio and are generally characterized as having:\n\n\n- Solana as the operator\n- Solana at a high working interest\n- Solana not promoted\n- Attractive fiscal terms\n\n\nIntegral to this strategy is moving non-core assets out of Solana's\nportfolio, allowing capital and human resources to be focussed on these higher\nvalue assets - located in the Llanos, Putumayo and Catatumbo basins.\n\n\nConsolidation Impacts\n\n\nFinancial - This disposition results in changes to entitlements under the\nEPA but is otherwise for zero consideration. However, Solana will receive US\n$3.2 million for the outstanding balance of an escrow account established to\nguarantee its share of the Guariquies-1 long term test and Guariquies-3\ndrilling costs. An additional US$0.2 million is expected in post closing\nadjustments relating to EPA capital and revenue adjustments to December 1,\n2006. Solana will also receive 100% of its share of Puma-1 completion costs\n(estimated at US$1.4 million dollars) from 50% of Ramshorn's operating profits\nderiving from any potential Puma production. Solana is entirely relieved of\nits obligation to fund 48% of the Zeus-1 exploration well where Solana's\nremaining exposure was estimated at US$10.5 million.\n\n\nReserves & Resources - No reserves have been allocated to the EPA assets\nsince the commencement of operations in December 2004. Guayabillas and Alamo\nhave been drilled and abandoned, Puma and Guariquie...