13 Dec 2010 07:00
Immediate Release | 13 December 2010 |
GLOBAL ENERGY DEVELOPMENT PLC
("Global" or the "Company")
FARM-OUT AGREEMENT
Global Energy Development PLC, the Latin America focused petroleum exploration and production company (LSE-AIM: "GED"), is pleased to announce that the Company has reached an agreement to farm-out 60% of its interest in the Peruvian Block 95 Licence Contract (the "Contract") to Gran Tierra Energy, Inc. (NYSE Amex: "GTE", TSX: "GTE"). Following the farm-out, Global will retain a 40% interest in the Contract through its wholly-owned subsidiary Harken del Peru Limitada.
Under the terms of the agreement, GTE will become the operator of the Contract, subject to and following approval from the Peruvian authorities, and will assume 100% of the costs of an exploration well up to a maximum of US$ 15 million. GTE will also assume its share of the past costs incurred by the Company on the Contract for US$ 2 million.
The Contract is currently under force majeure until the final environmental sub-permits are received. The Company anticipates receiving the remaining sub-permits in the first half of 2011. The exploration well is therefore expected to be drilled before the end of 2011.
The Contract area is located in the Marañon Basin of north-eastern Peru and contains the Bretaña-1 discovery well, which was drilled in 1974 and tested 18 degrees API gravity oil at natural flow rates of approximately 800 barrels of oil per day. As certified by our independent reserve engineers, Ralph E. Davis Associates, Inc., the 2P reserves associated with the Contract are estimated at 21 million barrels (3P reserves at 63.9 million barrels).
This agreement represents an important opportunity for Global to accelerate its development and unlock these important 2P and 3P reserves.
Commenting, Stephen Voss, Vice Chairman, said:
"We are very pleased to have reached this agreement with a partner that has an impressive track record of oil exploration and subsequent development success in South America and are convinced that it will bring significant mutual benefits to both companies."
For further information:
Global Energy Development PLC
Patrick Garo, Chief Financial Officer | +44 (0)20 3178 5156 |
www.globalenergyplc.com |
Matrix Corporate Capital LLP
Alaistair Stratton | +44 (0)20 3206 7000 |
Tim Graham |
Notes to Editors:
The Company's shares have been traded on AIM, a market operated by the London Stock Exchange, since March 2002 (LSE-AIM: "GED"). The Company's balanced portfolio covers the countries of Colombia and Peru, and comprises a base of production, work over opportunities and high potential developmental drilling. The Company currently holds six contracts: five in Colombia and one in Peru.
The information contained within this announcement has been reviewed by Mr. Stephen Voss, a Director of the Company, for the purpose of the Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in respect of AIM companies which outlines standards of disclosure for natural resource projects. Mr. Voss is a Registered Professional Engineer in Texas and has been a Member of SPE for 27 years.