SGS Acquisition Wraps Up Purchase Of Quetzal Colombian Subsidiary

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
2MM
Description

Bought Quetzal Energy Inc., which holds up to 100% WI in 1 petroleum sharing contracts inn Colombia, a 500-horsepower Harold Lee trailer-mounted drilling rig, a Wilson 38 work-over rig and some inventory of oilfield equipment, gaining 16.4 BOE/d.

Barbados-based special-purpose vehicle SGS Acquisition Co. Ltd. has closed its purchase of 100% of the shares outstanding of Quetzal Energy Inc. (QEG) from parent Quetzal Energy Ltd., Toronto, (Toronto Venture: QEI) for C$1.5 million in cash.

Along with cash consideration, Quetzal has received a carried interest of 10% on the first two wells drilled by SGS Acquisition on the QEG properties. Quetzal will also retain an option to participate, by paying its share, in 10% of all other wells drilled by SGS on the QEG properties.

The principal assets of QEG are comprised of 80%-100% interest in two petroleum sharing contracts (6-93 and I-2005) in Colombia, a 500-horsepower Harold Lee trailer-mounted drilling rig, a Wilson 38 work-over rig and some inventory of oilfield equipment.

Total oil production for QEG was approximately 6,000 barrels for the fiscal year ended December 31, 2011, 3,850 barrels for the fiscal year ended 2010 and 5,905 barrels for the fiscal year ended December 31, 2009.

With recent drilling success in Colombia, Quetzal has decided to focus 100% of its management time and financial resources on its four private participating interests in Colombia.