PetroMagdalena Pumps Up Its Stake In Colombian Block

To acquire 32.5% WI in 31,606-hectare Arrendajo block in the Colombia Llanos basin.

PetroMagdalena Energy Corp., Toronto, (Toronto Venture: PMD) has executed a conditional assignment agreement whereby it will acquire an additional 32.5% working interest in the Arrendajo block in the Llanos basin from Pacific Stratus Energy Colombia Corp. and Sucursal Colombia, a subsidiary of Pacific Rubiales Energy Corp. for US$10 million.

PetroMagdalena will pay the purchase price out of sales from production from the Arrendajo block.

Pro forma, PetroMagdalena will have a 67.5% participating interest in the block.

The block covers an area of 31,606 hectares, and it is north-east of the Cubiro block. Its exploration plays are of the same type as in the Cubiro block, where PetroMagdalena has recently discovered three light oil fields and added 5 million barrels of 2P reserves. Operations at Arrendajo will be supported by the pre-existing main operations base of the Company on the nearby Cubiro block.

PetroMagdalena has agreed to assume a full carry obligation of the obligations of Pacific Stratus under the ANH contract, until the assignment is approved.