Amerisur signs farm-in agreement with Gulfsands for Colombia asset

30th Jul 2018 11:58

(Sharecast News) - Oil and gas producer and explorer Amerisur Resources has signed a farm-in agreement with Gulfsands Petroleum for the acquisition, subject to Agencia Nacional de Hidrocarburos (ANH) approval, of the 100%-operated working interest in the Putumayo 14 block in Colombia, it announced on Monday.The AIM-traded firm said the Put-14 block covered 46,361 hectares in the Caguan-Putumayo basin, and is located contiguously to the south of its 100%-owned Terecay block.It said the contract was an exploration and production contract held with the ANH, carrying an x-factor of 5%.The x-factor is the percentage of gross production after royalty offered by a contractor to the ANH state agency during the bidding process for Colombian assets.Amerisur said the contract was currently in phase 0, and was in the process of performing a previous consultation with a single indigenous community within the block as required by law before operations commence.Gulfsands indicated Put-14 was non-core to its forward strategy, and in light of the company's strategic focus on the Putumayo basin, Amerisur undertook a review of the contract area, which it said indicated attractive follow-on prospectivity associated with the Terecay acreage.Under the terms of the FIA, Gulfsands would make a contribution to the previous consultation and operational costs of $1.25m.Additionally, Gulfsands would also transfer the required guarantee for the phase 1 work programme in favour of Amerisur in the amount of $1.7m.There was no consideration payable from Amerisur to Gulfsands.Subsequent to the previous consultation, phase 1 commitments would be the acquisition of 98km of 2D seismic data, and the drilling of one exploration well.The period of phase 1 would be 36 months from the end of phase 0.Amerisur and Gulfsands would now apply to ANH for the transfer of operatorship, and the 100% working interest in the contract."This is an attractive deal for the Company, further consolidating our strategic position in the Putumayo and adding additional prospective acreage to our Terecay-Tacacho play fairway, where we see significant potential in multi-layered reservoirs, proven in our existing operations, in legacy wells and within Ecuador," said Amerisur chief executive John Wardle."The block has further strategic importance in that it extends south towards the Putumayo river and Ecuadorian border."This brings benefits in terms of accessibility for operations and eventual evacuation of produced crude by providing a pathway to access the pipeline systems of Ecuador, in a similar way to the existing OBA system in our Platanillo field."