21 Nov 2011 07:00
21 November 2011
Andes Energia plc
("Andes" or the "Company")
Acquisition of Grecoil
5.89 MM boe P1-P2 reserves
The Board of Andes (AIM: AEN; BCBA: AEN), the Latin American energy group, is pleased to announce the acquisition of certain interests in oil and gas licences in Argentina.
HIGHLIGHTS
·; Acquisition of remaining 66% working interest in the producing block Vega Grande of which it already owns 34%; Vega Grande holds 4.3 MMboe P1-P2
·; Acquisition of 100% working interest in the development block La Paloma - 0.67MMboe P1-P2; and
·; Acquisition of 100% working interest in the development block Cerro Alquitran - 0.92MMboe P1-P2
Vega Grande
Vega Grande is a producing asset located in the Neuquen basin in the province of Mendoza. Approximately 172km of 2D seismic has been shot over the licence, which Andes considers to be under explored. A reserves report was produced by Oilfield Production Consultants (OPC) Ltd for the Vega Grande block, which shows P50 recoverable reserves of 4.3 million boe and 3.7 BCF of gas.
Reserves | P90 | P50 | P10 |
Oil MMm³ (MMb) | 0.35 (2.2) | 0.69 (4.3) | 1.18 (7.4) |
Gas MMm³ (BCF) | 49 (1.7) | 104 (3.7) | 184 (6.5) |
Cont. Resources | P90 | P50 | P10 |
Oil MMm³ (MMb) | 0.33 (2.1) | 0.56 (3.5) | 0.90 (5.7) |
Gas MMm³ (BCF) | 55 (1.9) | 110 (3.9) | 190 (6.7) |
Accumulated production 1.6MMboe. Current production of 3,090 bbl per month.
La Paloma
La Paloma is a development asset located in the Neuquen basin in the province of Mendoza. A reserves report was produced by Esexhi SRL for the La Paloma block, which shows P50 recoverable reserves of 0.67 million boe.
Cerro Alquitran
Cerro Alquitran is a development asset located in the Neuquen basin in the province of Mendoza. A reserves report was produced by Esexhi SRL for the Cerro Alquitran block, which shows P50 recoverable reserves of 0.92 million boe.
Acquisition
The interests in the above licences have been acquired through the acquisition of 100% of the issued share capital of Grecoil y Cia. S.A. ("Grecoil"). For the year ended 31 December 2010, Grecoil made an audited profit before tax of AR$1.9 million on a turnover of AR$8.2 million. As at 31 December 2010, Grecoil had net assets of AR$2.9 million and net current assets of AR$5.6 million.
Consideration for the acquisition of Grecoil will be satisfied through the issue of 18,664,963 new ordinary shares of 10 pence each in the share capital of Andes and by Andes assuming the obligations to repay a loan of US$6,170,933 due to a third party. In addition in the event reserves are certified from the commercial discovery of new unconventional resources a deferred consideration up to a maximum of US$16,390,000 may become payable.
Luis Alvarez Poli, Chief Executive Officer of Andes, commented, "We are delighted to be able to complete the acquisition of Grecoil. We believe these blocks are under-exploited with high potential in conventional and unconventional resources. This step transforms AEN into a full producer and operator with capabilities to become an important player in the Argentina oil and gas industry."
Qualified Person Review
In accordance with AIM guidance for mining, oil and gas companies, Mr. Juan Carlos Esteban has reviewed the information contained in this announcement. Mr. Juan Carlos Esteban, an Officer of the Group, is a petroleum engineer with over 20 years of experience and is a member of the SPE (Society of Petroleum Engineers).
Application for Admission, Completion of the Acquisition and Total Voting Rights
Application will be made for the 18,664,963 new Ordinary Shares to be admitted to AIM, which is expected to become effective on 25 November 2011.
Following admission of the 18,664,963 ordinary shares, the total number of issued ordinary Shares will be 175,690,180 Ordinary Shares. The Company does not hold any Ordinary Shares in treasury. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Service Authority's Disclosure and Transparency Rules.
For further information please contact:
Andes Energia plc | Luis Alvarez Poli, CEO Nigel Duxbury, FD
| T: +442074955326 |
Arbuthnot Securities | Antonio Bossi Ed Groome
| T: +442070122000 |
Buchanan
| Tim Thompson Ben Romney | T: +442074665000 |
Note to Editors:
Andes is a Latin American energy group, with oil and gas, electricity distribution and hydro-electric power interests in Argentina. The Company's focus is on the Argentinean energy sector, which it believes offers premium assets at undervalued prices.