07/12/2007 - 13:54

Baraka takes $2m stake in Colombian oil venture

07/12/2007 - 13:54

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West Perth-based Baraka Petroleum Ltd has acquired a 20 per cent stake in a highly prospective Colombian Block for US$1.8 million ($2 million).

Baraka takes $2m stake in Colombian oil venture

West Perth-based Baraka Petroleum Ltd has acquired a 20 per cent stake in a highly prospective Colombian Block for US$1.8 million ($2 million).

The agreement with Omega Energy Colombia S.A, a subsidiary of Omega Energy International S.A., concerns the highly prospective Chicuaco Block in the Llanos Basin, eastern Colombia.

Baraka managing director Dr Mark Fenton said it was contining to build on its business connections in Colombia.

Having already recently completed the La Punta oilfield transaction, the acquisition of the Chicuaco Block in addition to having had several high quality opportunities offered to it recently demonstrated Baraka's developing business profile in the region, he said.

"This acquisition will give the Company the opportunity to explore in an area surrounded by oil production and in a Block with several highly prospective independent exploration targets."

 

The full company announcement appears below:

BARAKA BUILDS COLOMBIAN PORTFOLIO WITH ACQUISITION OF 20% INTEREST IN CHICUACO BLOCK, COLOMBIA

Highlights

- Baraka Petroleum to acquire a significant stake in a highly prospective Colombian Block for US$1.8M

- Transaction to be funded from existing cash reserves

- Low Cost Entry In Established Producing Area

- Monza-1 Exploration Well Spuds 20 December

- Potential for Early Production

- Further Exploration Potential Already Identified

Baraka Petroleum Limited ("Company" or "Baraka") is pleased to announce the execution of an agreement with Omega Energy Colombia S.A. (Omega Energy), a subsidiary of Omega Energy International S.A., to acquire a 20% interest in the highly prospective Chicuaco Block in the Llanos Basin, eastern Colombia.

Baraka's acquisition cost for its 20% interest in the Block is US$1.3 million for the first US$5 million in work expenditure. Baraka's total expenditure to the end of the drilling of the Monza-1 exploration well is expected to be US$1.8 million. The acquisition will be funded from current cash reserves.

The Chicuaco Block is held under a Hydrocarbons Production and Exploitation Agreement with the Colombian national Oil & Gas agency, Agencia Nacional De Hidrocarburos (ANH). The Block is located approximately 70 kilometres from the La Punta Oilfield in which Baraka has a participating interest and is in the vicinity of several producing oilfields including the prolific Rubiales oilfield.

Currently the Operator of the Block is preparing for the drilling of the Monza-1 exploration well which is scheduled to commence drilling as soon as 20 December 2008. This well will target a number of intra-Carbonera, and Guadalupe reservoir objectives in a simple fault-dependant structure that has been identified using recently acquired 3D seismic. Un-risked recoverable resource for the Monza prospect is estimated by the Company to be in the range of 2-5 million bbls.

Estimated time to completion of the well is approximately one month. If successful, the well will be immediately production tested and will thereafter produce into temporary facilities until such time as permanent facilities are constructed.

Several other prospects and leads have been identified within the Block for possible future exploration drilling. A number of these prospects are considered to be independent of the results of Monza-1. Total potential un-risked recoverable resource for the Block is estimated by the Company to be 5-20 million bbls.

Baraka's Managing Director Dr Mark Fenton said:

"Baraka has continued to build on its business connections in Colombia. Having already recently completed the La Punta oilfield transaction, the acquisition of the Chicuaco Block in addition to having had several high quality opportunities offered to us recently demonstrates Baraka's developing business profile in the region."

"This acquisition will give the Company the opportunity to explore in an area surrounded by oil production and in a Block with several highly prospective independent exploration targets."

"This opportunity fits Baraka's objective of targeting near-field exploration opportunities in producing areas and is a further step in the Board's plan to re-balance the Company's exploration and production portfolio."

"The Company is continuing to review further acquisitions within South America focusing on near-field exploration, production and development opportunities of a financial dimension that can be accommodated by Baraka's existing cash and market capitalisation."

 

 

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