Petro Vista acquires 100% of Morichito block

California-based Petro Vista Energy (TSX-V: PTV) has obtained the remaining 47.8% stake in the Morichito block in Colombia's Llanos basin, bringing its interest to 100%, the company said in a statement.

Petro Vista obtained the initial stake in the block in July and the rest was purchased from Eagle Transport.

The company is expecting net production of 2,100b/d from the block.

Around 600b/d could come from the completion of an existing discovery and a new exploration well could yield 1,500b/d, according to the statement.

Geotechnical and engineering analysis has been completed on five exploration prospects on the block, the company said.

Petro Vista says it plans to begin completion of the Morichito-M2 discovery well in November and will spud the Morichito-1N exploration well in 1Q09.

The Canadian company has already started building access roads and is evaluating several options for drilling rigs and services.

Colombian hydrocarbons regulator ANH has granted a 12-month contract extension for the drilling of the exploration well.

"The acquisition of the remaining interest in this block at a low upfront cost consolidates our interest in one of our highest potential assets," Petro Vista CEO Read Taylor said in the statement.

"The cash flow from the well completion and the existing Tartaruga block production in Brazil will allow us to progress our high quality opportunity-rich development and exploration drilling portfolios," he added.

Petro Vista acquired the interest for a US$500,000 cash payment due on November 26 in addition to US$2.5mn to be paid from 40% of net production from the block. Petro Vista will also pay a 1% net production royalty and granted Eagle a waiver for its obligations to repay its working interest commitments, according to the statement.

Publication: Business News Americas - English News
Provider: Business News Americas
Date: October 20, 2008