(Oslo, 2 March, 2012) InterOil Colombia E&P Inc., an affiliate of InterOil E&P ASA (IOX), is pleased to announce that it has entered into a binding memorandum of understanding with Pangea Energy Corp. in respect of a 50% farm-out of the COR-6 block and a 40% farm-out of the Altair block.
IOX is currently the operator of both blocks and owns 100% and 90% of the working interest on COR-6 and the Altair blocks respectively.
Pangea Energy has agreed to cover USD 17.2 million of the total work commitment of USD 22 million in Phase 1 of the COR-6 contract.
In addition Pangea Energy will pay a signing fee of USD 3 million and cover USD 7.2 million of the remaining work commitment totalling USD 12 million on the Altair block. These farm-out agreements are subject to ANH approval.
"Pangea is a very interesting company with an innovative view for both these blocks. We welcome the possibility to work with Pangea in the future", explains Mårten Rød chairman IOX.
Quinton Rafuse, President and Chief Executive Officer of Pangea Energy, stated "This farm-in represents a strategic entry into the Colombian market for Pangea. In Interoil, Pangea finds a well-established operator and two key assets blending near-term cashflow and impactful exploration potential. We are excited to work with Interoil and develop a long-term relationship."
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InterOil Exploration & Production ASA is a Norwegian based exploration and production company - listed on the Oslo Stock Exchange - with focus on Latin-America. The company is operator of several production and exploration assets in Peru, Colombia and Ghana. InterOil currently employs approximately 250 people and is headquartered in Oslo.