CALGARY and LONDON, Dec. 3 /CNW/ - Solana Resources Limited (TSX-V: SOR; AIM: SORL) is pleased to announce it has entered into a commercial agreement to farmout a fifty percent (50%) interest in the Garibay block, located in Colombia's Llanos basin, to CEPSA Colombia SA ("CEPCOLSA") a wholly owned subsidiary of Compania Espanola de Petroleos, S.A. ("CEPSA"), the Spanish based diversified energy company.
Subsequent to this farmout, Solana and CEPCOLSA will each hold a 50% participating interest in Garibay. The Garibay block is subject to an Exploration and Production Contract with Agencia Nacional de Hidrocarburos ("ANH"), the Colombian Government agency regulating the petroleum sector. The farmout to CEPCOLSA requires the previous approval of ANH to be effective.
Under the terms of the agreement CEPCOLSA will be responsible for 100% of the costs associated with the third phase exploration well which must be drilled by October 2008. CEPCOLSA, the operator of a neighbouring block, will also be the operator of Garibay, subject to the approval of ANH. The exploration well location will benefit from the extensive 3D seismic which Solana acquired in early 2007.
This farmout furthers Solana's exploration strategy to concentrate on the five contiguous blocks it operates in the eastern portion of the Llanos basin (Guachiria, Guachiria Norte, Guachiria Sur, Colona and San Pablo) and the highly prospective operated Catguas block in the Catatumbo basin.
Solana Resources Limited
Solana (www.solanaresources.com) is an international resource company engaged in the acquisition, exploration, development and production of oil and natural gas. The Company's properties are located in Colombia, South America and are held through its wholly owned subsidiary, Solana Petroleum Exploration (Colombia) Limited. The Company is headquartered in Calgary, Alberta, Canada.
Forward Looking Statements
Certain information regarding the Company, including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities law and necessarily involve risks associated with oil and gas exploration, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserve estimates, mechanical problems, equipment limitations, environmental risks, competition from other producers and ability to access sufficient capital from internal and external sources; as a consequence, actual results may differ materially from those anticipated.
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