C&C Energia Ltd. says that its indirect wholly owned subsidiary Grupo C&C Energia (Barbados) Ltd. (Grupo C&C), has signed a purchase and sale agreement with Ramshorn International Limited ("Ramshorn"), to acquire a company which will hold certain of Ramshorn's oil and gas properties in Colombia (the "Acquisition"). In addition, C&C has entered into an engagement letter agreement with a syndicate of underwriters with respect to a $100 million "bought deal" public offering of subscription receipts.

Acquisition The purchase price of the acquisition is US$89 million (subject to certain customary closing adjustments), payable in cash, with an effective date of January 1, 2011. The oil and gas properties, located in the oil rich Central Llanos Basin, are comprised of a 70% operated interest in the Cachicamo E&P Block comprised of 87,646 acres (61,532 net acres) and a 50% non-operated interest in the Pajaro Pinto Exploration Block comprised of 60,080 acres (30,040 net acres). C&C currently holds the 30% interest in the Cachicamo Block that Ramshorn does not own and is the operator and 50% working interest owner of the Pajaro Pinto Block.

The Cachicamo Block currently produces approximately 1,400 bopd (980 bopd net to the acquired interest) of light oil and is anticipated to average 1,860 bopd (1,300 bopd net to the acquired interest) for 2011. Reserves, evaluated in accordance with NI 51-101 by Lonquist & Company, LLC, effective as of December 31, 2010, are 2.27 million barrels Proven (IP), 2.92 million barrel Proven & Probable (2P) and 3.74 million barrels Proven & Probable & Possible (3P). In addition, C&C anticipates the drilling of three development wells and three exploration wells on the Cachicamo Block in 2011. Cachicamo is covered with an extensive 3-D seismic survey and there are several undrilled exploration targets identified by C&C on this data.

The Pajaro Pinto exploration Block, comprised of 60,080 acres, is located approximately 50 km southwest of the Cachicamo acreage. An extensive 3D seismic survey was completed on these lands in 2010 with C&C as operator. Up to 5 exploration prospects were identified and C&C plans to drill at least two prospects this year with the first well to spud in the second quarter of 2011.

Richard A. Walls, President and CEO of C&C stated that, "the acquisition of these assets is not only accretive to C&C but is also strategic to C&C's holdings in the Llanos Basin of Colombia. Cachicamo is adjacent to C&C's major producing property on the Cravoviejo E&P Block and consolidation of Cachicamo production with C&C's 100% owned Cravoviejo production facilities is expected to result in significant cost and efficiency savings over the life of the property. In addition we have identified several attractive structural prospects with our extensive 3-D seismic on both blocks that we intend to commence drilling on this year."

Closing of the proposed Acquisition is subject to customary closing conditions including the receipt of all necessary regulatory approvals. C&C expects that the transaction will close in late April, 2011.

Tags: C&C Energia Ltd