Gold Oil, the AIM-listed oil and gas exploration and production company, is pleased to announce that it has farmed out 80% of its interest in the block Z-34, offshore Peru, to Union Oil & Gas Group Corp ("Union Oil & Gas"). Gold Oil will be carried in the 3 remaining Exploration phases and keep a 20% interest.
Gold Oil will receive a total of $6 million for the Farm-out of which it will receive $4 million by selling Plectrum Petroleum Limited. Plectrum is 100% owned by Gold Oil and has a 50% participation in Block Z-34. Gold Oil will receive the remaining $2 million when Union Oil & Gas has been qualified by Perupetro for the additional 30% participation interest in Z-34.
Union Oil & Gas invests in oil & gas exploration and production in Latin America, with a focus on Colombia, Paraguay, Peru and Uruguay. It is a portfolio company of Union Group, a privately owned firm which holds significant strategic interests in businesses spanning the agriculture, energy, forestry, infrastructure, minerals, oil & gas and real estate sectors in Latin America.
Since inception in 2007, Union Group has focused on high growth Latin American economies characterised by under-developed natural resources and infrastructure sectors, a stable political environment and robust economic regulation.
Led by its founder and president, Juan Sartori, companies under Union Group's umbrella have an estimated combined value of approximately $1 billion. In 2013, leading Canadian investment house, Dundee Corporation, acquired a minority stake in The Group.
Commenting on the update, Chief Executive Officer Rudolph Berends said, "I am pleased to be able to announce this agreement with Union Oil & Gas concerning our Block Z34 offshore northwest Peru".
An independent Competent Person's Report ("CPR") from DeGolyer and MacNaughton ('D&M"), prepared in March 2012, provides new volume and valuation estimates for twelve prospects identified by Gold Oil on the block. The mean prospective resources certified by D&M total a combined 2.02 billion barrels of oil with a mean potential net present value of US$ 2.6 billion.
Rudolph Berends further commented: "This is a very important step for our company having achieved a full carry through the remaining 3 exploration phases of the contract by a very strong financial partner which will free up resources to develop and expand the company aggressively in the Americas. Also the planned increased drilling activity in the adjoining blocks supports the renewed interest in the offshore blocks in Peru".
Guzman Fernandez, Chief Executive Officer, Union Oil & Gas Group Corp, added:
"We are delighted to announce this acquisition, which we believe has outstanding potential. The combination of our experienced in-house technical team and our access to significant capital will enable us to put real momentum behind the next stages of exploration. In addition, we will continue to evaluate other similar opportunities, as we look to expand our presence in the region."
