We have entered into two joint ventures, with Petroleos del Norte S.A. (“Petronorte”), a Colombian subsidiary of Petrolatina Plc. (AIM: PELE), and with Emerald Energy Plc Sucursal Colombia (“Emerald”), a Colombian branch of Emerald Energy Plc. In both of these ventures the assignment to us of our participation interest is subject to approval by the Agencia Nacional de Hidrocarburos (“ANH”), Colombia’s hydrocarbon regulatory agency.
In addition, in March 2010, we acquired all of the outstanding capital stock of Avante Colombia S.à r.l. ("Avante Colombia") from Avante Petroleum S.A. ("Avante"); Avante Colombia currently has a 50% participation interest in, and is the operator of, the Rio de Oro and Puerto Barco production contracts with Ecopetrol S.A. in the Catatumbo region of northeastern Colombia, under a joint operating agreement with Vetra Exploración y Producción S.A. ("Vetra").
On December 22, 2008, through our operating subsidiary, La Cortez Energy Colombia,Inc., we signed an initial memorandum of understanding with Petronorte and on October 14, 2009 we signed a joint operating agreement with Petronorte that entitles us to a 50% net working interest in the Putumayo 4 block located in the south of Colombia.
The Putumayo Block covers an extension of 51,333 hectares (126,847 acres) located in the Putumayo basin and has over 1,000 Km of pre-existing 2D seismic through which La Cortez Energy and Petronorte have identified promising leads.
On February 6, 2009, we entered into a farm-in agreement with Emerald for a 20% participating interest in the Maranta exploration and production (“E&P”) block (“Maranta”) in the Putumayo Basin in Southwest Colombia.
The Maranta block covers an area of 36,608 hectares (90,459 acres) in the foreland of the Putumayo Basin. Emerald completed the first phase exploratory program for the Maranta block by identifying several promising prospects and leads and completed the second phase of the Maranta exploratory program by drilling and completing the Mirto-1 exploratory well which is currently in production testing.
On March 2, 2010, we acquired all of the outstanding capital stock of Avante Colombia, which became our wholly owned subsidiary. As consideration for the acquisition, we issued an aggregate of 10,285,819 shares of our common stock to Avante.
Avante Colombia currently has a 50% participation interest (acquired in late 2005) in, and is the operator of, the Rio de Oro and Puerto Barco production contracts with Ecopetrol S.A. in the Department of North Santander in the Catatumbo region of northeastern Colombia, under an operating joint venture with Vetra. The Rio de Oro field covers 5,590 acres (2,262 hectares). Both production contracts are for a ten-year term expiring at the end of 2013.
We have acquired participation interests in two exploration assets in south Colombia and we intend to acquire producing oil and gas properties (and/or fields) where we believe significant value exists or where additional value can be created. Our management team is primarily interested in developmental properties where some combination of the following exists:
We intend also to continue pursuing joint ventures or farm-ins in exploration ventures with limited risk, in areas where nearby oil discoveries have been made.
Phase 1 We are concentrating our initial efforts in Colombia where opportunities as well as operating terms and conditions are perceived in the industry to be appropriate for small, early stage oil and gas E&P companies.
Phase 2 Once we have established our business in Colombia, we intend to turn our attention to new opportunities in other South American countries. We intend to take advantage of promising opportunities in these additional markets while we consolidate our E&P activities in Colombia.
We are committed to being a socially responsible company. We strive to engage in best-business-practices and are acutely sensitive to promoting and protecting the local communities and the environment in the regions where we operate. As a matter of policy, we respect all cultures and beliefs, and are an equal-opportunity employer and contractor.