25th Feb 2008 11:11
Pan Andean Resources PLC25 February 2008 Major Oil Group Joint Ventures Pan Andean Blocks 114 and 131 in Peru Highlights: > CEPSA to joint venture with Pan Andean on Peruvian blocks 114 and 131 > Pan Andean to recover costs incurred to date > CEPSA to cover exploration costs including first well and half of second wellon both blocks Pan Andean (AIM:PRE), the AIM listed oil and gas producer, is pleased toannounce that it has agreed terms on which CEPSA, a major international Spanishbased oil company, will joint venture Blocks 114 and 131 in the Ucayali jungleof Peru. Previous drilling proved a working oil system in the Blocks. Thejoint venture is part of the Pan Andean strategy to reduce financial exposurewhilst accelerating drilling plans in high potential blocks. The agreement is subject to the regulatory approval of the Authorities. Oncesuch approval is obtained, CEPSA will reimburse Pan Andean for all costsincurred to date, estimated at US$3m. Peruvian Block 114 Pan Andean will dilute its interest in Block 114 to 30%, in return for CEPSAincurring all exploration costs through the first well and half of the secondwell. The new ownership of Block 114 will be 30% Pan Andean, 10% CCP (a local privatePeruvian company) and 60% CEPSA. CEPSA will operate the block. Block 114 is situated in 1.8 million acres of jungle terrain, drained bynavigable rivers. Environmental preparation and permitting for seismic andwells are almost completed. Peruvian Block 131 CEPSA is also joint venturing and will operate, the 100% Pan Andean ownedneighbouring block 131. Pan Andean will dilute its interest in Block 131 to 30%, in return for CEPSAincurring all exploration costs through the first well and half of the secondwell. Block 131 borders Block 114, immediately to the west. The Block covers 2.5million acres in the central Peruvian Amazonian jungle region. It is on trendwith oil discoveries, and includes two hydrocarbon shows and three oil seeps.There is a producing oil field cut out of Block 131, operated by Maple of theUSA. David Horgan, Managing Director of Pan Andean Resources, commented: 'CEPSA's joint venture is a convincing statement of the exploration potential ofBlocks 114 and 131, as well as an expression of confidence in Peru as anexcellent investment location. CEPSA, in which Total holds 48%, and plays asupporting role, is highly regarded in the industry as a serious player with astrong technical orientation. We look forward to a successful joint venture andan active and positive exploration campaign'. This announcement has been approved by Ivan Sandrea, Director, Pan Andean. MrSandrea has more than 10 years of international E&P experience. Contacts: Pan Andean + 353 1 833 2833David Horgan, Managing DirectorJohn Teeling, Chairman College Hill +44 (0)20 7457 2020Paddy BlewerNick Elwes Blue Oar Securities +44 (0)117 933 0020John WakefieldSimon Moynagh www.panandeanresources.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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