Pentanova Energy Announces Farmout Agreement on Colombian Gas Property

About this update from Ng Energy International Corp

[{"type":"text","content":"\n\n\n\nPentanova Energy Announces Farmout Agreement on Colombian Gas Property\n\n/* Style Definitions */\nspan.prnews_span\n{\nfont-size:8pt;\nfont-family:\"Arial\";\ncolor:black;\n}\na.prnews_a\n{\ncolor:blue;\n}\nli.prnews_li\n{\nfont-size:8pt;\nfont-family:\"Arial\";\ncolor:black;\n}\np.prnews_p\n{\nfont-size:0.62em;\nfont-family:\"Arial\";\ncolor:black;\nmargin:0in;\n}\n\n\n\n\n\n\n\nCanada NewsWire\nVANCOUVER, June 21, 2018\n\n\n\nVANCOUVER, June 21, 2018 /CNW/ - PentaNova Energy Corp. (the \"Company\" or \"PentaNova\") (TSXV: PNO), is pleased to announce the signing of the SN-9 Farm Out Agreement (the \"Agreement\") with Panacol Oil & Gas (\"Panacol\"), a wholly owned subsidiary of LATAM Oil & Gas. Under the terms of the Agreement, Panacol will fully fund the Company's commitments during the first phase of the SN-9 Exploration and Production Contract for the amount of US$22.29 million, which will give Panacol the right to earn up to a 40% economic beneficial interest in the SN-9 Block from the Company's 80% economic beneficial interest. Assignment of working interests for both parties is subject to approval from the National Hydrocarbon Agency of Colombia. The Agreement is expected to close within the next 30 days during which time Panacol will be required to place US$3.0 million in escrow to fund near-term activities. In addition, Panacol is required to provide a standby letter of credit for US$3.0 million to guarantee further payments into the escrow account and pay approximately US$650,000 in past costs. Under the terms of the Agreement, Panacol will recover 50% of the funds invested from 70% of the proceeds of the Company's net production. \n\nRalph Gillcrist, President and CEO, commented:\n\n\"The SN-9 block has all the hallmarks of being an exceptional core asset for PentaNova being adjacent to the prolific Canacol Energy Ltd. (\"Canacol\") gas producing assets. By entering into this Agreement with Panacol, PentaNova is in a position to execute the exploration program required to confirm the gas potential of the block. We look forward to leveraging the abundant experience of the Panacol team to complement the PentaNova team and accelerating our operational activities.\"\n\nSN-9 Block\n\nThe 313,638 acre SN-9 block is located in the northern province of Cordoba, in the Lower Magdalena Basin of Colombia d...

More updates from Ng Energy International Corp