2009-08-19-2007-12-01-2007-12-01

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
$30.6MM
Description

Acquired 23% participation interest, 73.15% participation interest each in Bajada del Palo concession in Neuquen province, in SW Argentina, 110,000 acres. Est. proved 1.1 MMBO, probable 1.9 MMBO.

Apco Argentina Inc., Tulsa, Okla., (Nasdaq: APAGF) has acquired a 23% participation interest and Argentina-based Petrolera Entre Lomas SA has acquired a 73.15% participation interest in the Bajada del Palo concession in the province of Neuquen in southwestern Argentina from Petrouruguay SA and Petrobras Energia SA for a combined US$30.6 million. Petrolera is Apco's partner and is operator of the neighboring Entre Lomas concession and the Agua Amarga exploration area. Petrolera will also be the operator of Bajada del Palo. Apco is acquiring a 3% interest from Petrobras Energia and a 20% interest from Petrouruguay. Petrolera is acquiring all of its interest from Petrobras Energia. Apco's portion of the purchase price is $7.3 million and will be funded from general corporate funds. Because Apco has a 40.724% ownership in Petrolera, it will own a combined direct and indirect interest in Bajada del Palo of 52.7%. Apco's direct and indirect purchase cost considering its equity interest in Petrolera equals $16.8 million. Bajada del Palo has a total surface area of approximately 110,000 acres. Three fields in the concession have produced 240 barrels of oil per day for the first nine months of 2007. Estimated proved reserves are 1.1 million barrels of oil and probable reserves are 1.9 million barrels of oil. Apco chairman and chief executive Ralph Hill says, "With this purchase, Apco now holds interests in three contiguous blocks in the Neuquen basin, the Entre Lomas and Bajada del Palo concessions and the Agua Amarga exploration area." These three properties have a combined surface acreage totaling approximately 385,000 gross acres and 203,000 net acres. The primary target formations in Bajada del Palo are the same as those that have been developed and produced in Entre Lomas. The property also is considered to have exploration potential beneath the lowest known producing formations in either Entre Lomas or Bajada del Palo. Apco plans a 3-D seismic campaign and to begin workovers and drilling by mid-2008. The effective date is Sept. 1.