ExxonMobil Enters Colombia Unconventional Play

From Rig Zone

By Karen Boman

ExxonMobil will farm into an interest in Colombia’s Middle Magdalena Basin through an agreement with Sintana Energy’s subsidiary Patriot Energy Oil & Gas.

The U.S. oil major will acquire an undivided 70 percent participation interest and operatorship in the unconventional formations in the 43,000-acre VMM-37 Block by completing a work program, Sintana said in a statement Monday.

In this program, ExxonMobil will pay all of the Phase 1 exploration costs for three wells. Drilling of the first exploration well is expected to begin in third quarter 2013. A consideration will also be paid to compensate Sintana for its past expenses connected with the block.

ExxonMobil will also have the option to proceed to the next phase, the development phase, of the program, in which it would pay all additional costs to a maximum of $45 million, with $10 million recouped by ExxonMobil from 50 percent of Patriot’s production proceeds.

Additionally, ExxonMobil would have the right to withdraw from the project, relinquish operatorship and reassign to Patriot the right to the 70 percent participation interest it would have retained had it met all investments and activities requirements of the agreement.

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