|By Marketwired .||
|October 3, 2013 08:00 PM EDT||
TORONTO, ONTARIO -- (Marketwired) -- 10/04/13 -- Stetson Oil & Gas Ltd. (TSX VENTURE:SSN) has terminated the farm-out agreement (the "Agreement") entered into with Sagres Energy Inc. related to LLA11, a 126,494 acre block located in the Llanos Basin of Columbia, a mature and prolific basin in the foreland of the Colombia Andes close to the giant Cano Limon Oil Field (the "Block"). Stetson successfully acquired the Block in June 2010 through a bidding round organized by the Agencia Nacional de Hidrocarburos of Colombia ("ANH").
As per the terms of the Agreement, Stetson farmed out 90% interest in the block to a subsidiary of Sagres in exchange for retaining a 10% carried interest during the exploration phase, which consisted of a minimum expenditure of USD$9 million over a period of 36 months.
Stetson has recently identified several violations and breaches of representations and warranties contained in the Agreement primarily as a result of the financial standing of Sagres and the work program and obligations not being fulfilled. Stetson has submitted a letter to Sagres identifying the various breaches and noting the termination of the Agreement. As a result of the termination of the Agreement Stetson now holds a 100% interest in the Block.
Stetson reports that it also received a letter from the ANH indicating that Stetson was in default under the exploration and production agreement entered into among the parties due to a failure to submit an additional guarantee for $3.5 million and for failure to advance the work program related to the Block. Stetson intends to try and negotiate an extension with the ANH so that the company may attempt to remedy the default.
Stetson is a junior oil and gas company with its securities listed under the TSX Venture Exchange under the symbol "SSN".
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements regarding the termination of the Agreement and the notice of default related to the exploration and production agreement. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Stetson, as the case may be, to be materially different from those expressed or implied by such forward-looking information. Although Stetson has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Stetson does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
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