La Cortez Energy to acquire Avante Petroleum Colombia

Dec 03, 2009 01:00 AM

La Cortez Energy and Avante Petroleum have announced that they have jointly signed a letter of intent for La Cortez to acquire Avante's subsidiary Avante Colombia in exchange for common stock of La Cortez. The purchase will include Avante Colombia's Colombian branch, Avante Colombia Sucursal.
Avante Colombia currently has a 50 % participation interest and is the operator of the Rio de Oro and Puerto Barco exploration and production contracts with Ecopetrol in the Catatumbo area in eastern Colombia. Independent engineering reports on behalf of Avante have estimated a total resource potential of approx. 1.4 mm bbl. (La Cortez has not yet had such reserves audited in conformity with US GAAP.)

Under the terms of the letter of intent, La Cortez and Avante will also enter into a joint venture to develop another exploration opportunity in Colombia.
The main terms of the proposed transaction are:
i) La Cortez will acquire 100 % of the outstanding stock of Avante Colombia in exchange for 10,285,819 [restricted] common shares of La Cortez, equivalent to 30 % of the total shares of La Cortez outstanding after the acquisition.
ii) In addition, Avante will invest a minimum of $ 2.5 mm and a maximum of $ 5 mm in the common equity of La Cortez at a price of $ 1.75 per unit, with each unit consisting of one share of La Cortez common stock and a three-year warrant to purchase one share of [restricted] common stock exercisable at $ 3.00 per share.
iii) Avante will have the right to nominate one member to the Board of Directors of La Cortez.

Marcel van Poecke, Chairman of the Board of Avante said, "The acquisition of our Colombian subsidiary by La Cortez represents a unique opportunity for our shareholders to further our expansion plans in Colombia, which Avante has long identified as a geographic priority given the country's substantial undeveloped hydrocarbon potential and attractive fiscal and regulatory framework. This strategic transaction with La Cortez allows Avante to partner with a management team and board highly experienced in successfully operating in Colombia."
"The combination of our existing assets in the highly prospective Catatumbo basin with La Cortez's significant asset base in the Putamayo Basin provides La Cortez with a platform of production and exploration assets. Our confidence in the future of La Cortez and its management team is further underscored by our capital commitment, which will allow La Cortez to aggressively continue to pursue additional development and exploration opportunities."

La Cortez Energy, Inc. is an early stage oil and gas exploration and production company currently pursuing a business strategy in the energy sector in South America, with an initial focus on identifying oil and gas exploration and production opportunities in Colombia. To that end, the company has established a branch, La Cortez Energy Colombia, Inc., with offices in Bogotá, Colombia, and recently signed a Joint Operating Agreement for a 50 % working interest in the Putumayo-4 block and a farm-in agreement for a 20 % working interest in the Maranta block, both in Colombia.

Avante Petroleum SA is an independent petroleum Exploration and Production Company based in Luxembourg, with corporate offices in Luxembourg and Switzerland, and representative offices in Colombia and Mexico where current operations are based.

Source / La Cortez Energy
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