VANCOUVER, July 3, 2018 /CNW/ - PentaNova Energy Corp. (the "Company" or "PentaNova") (TSXV: PNO), provides an update on the ongoing operations of the Llancanelo Asset with YPF S.A. ("YPF"), the operator of the concession.
As part of the various Argentina acquisitions completed by the Company in August and October 2017 relating to the Llancanelo heavy oil asset, the Company, through its wholly-owned subsidiary Alianza Petrolera Argentina SA (Alianza) initially acquired a 39% working interest in the Llancanelo block, and assumed cash call balances owed to YPF, and in November 2017, the Company farmed-in (the "Farm-In") to acquire an additional 11% working interest from YPF, subject to regulatory and administrative approvals and to the satisfaction of certain terms and conditions.
The Company has been attempting to negotiate a payment plan for cash call balances with YPF without success to date. The Company recently received formal notification from YPF (the "Notification") advising that, under the terms of the governing agreement of the Llancanelo joint venture project, oil production pertaining to the Company's participating interest in the concession will be retained by YPF, with sales of such oil production, net of operating costs, being credited towards PentaNova's outstanding cash call balances. Furthermore, the governing agreement of the Llancancelo joint venture states that a failure to pay the outstanding cash call balance may result in the defaulting party losing it's working interest. The Company is currently holding discussions with YPF in order to find a solution to retain the 39% working interest in addition to exploring financing options to cover the cash call balance.
In relation to the Farm-in agreement, Alianza has not been able to satisfy certain conditions precedent, including securing financing for its farm-in obligations and obtaining regulatory and administrative approval before the longstop date of June 22, 2018, and is consequently engaged in discussions with YPF.
About PentaNova
PentaNova is investing in proven leadership and technology to develop oil and natural gas fields it has acquired in areas surrounding some of the key energy producing areas in Colombia and Argentina. With decades of proven experience in Latin America and global energy development, PentaNova's leadership is working with local partners and service providers, including YPF, Argentina's respected energy producer, to deliver the energy for Latin America's future.
Forward-Looking Information
This news release contains "forward-looking statements" and "forward-looking information" (collectively referred to herein as "forward-looking statements") within the meaning of applicable securities legislation. Such forward-looking statements include, without limitation, forecasts, estimates, expectations and objectives for future operations that are subject to a number of material factors, assumptions, risks and uncertainties, many of which are beyond the control of the Company.
Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "continues", "projects", "forecasts", "potential", "budget" and similar expressions, or are events or conditions that "will", "would", "may", "could" or "should" occur or be achieved. This news release contains forward-looking statements, pertaining to, among other things, the following: the Company's ability to negotiate a payment plan with the YPF, the assumed cash call balances and PentaNova's ability to pay the same, the possibility that the Company may be required to withdraw from the underlying concession, the ability of the Company to mitigate the circumstances regarding its payment obligations under the Farm-In, the status of the Farm-In and the long-term plan for the Llancanelo joint venture project.
Although the Company believes that the material factors, expectations and assumptions expressed in such forward-looking statements are reasonable based on information available to it on the date such statements are made, undue reliance should not be placed on the forward-looking statements because the Company can give no assurances that such statements and information will prove to be correct and such statements are not guarantees of future performance. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties.
Actual performance and results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to: known and unknown risks, including those set forth in the Company's Management's Discussion and Analysis for the year ended December 31, 2017 (a copy of which can be found under PentaNova's profile on SEDAR at www.sedar.com); the risks associated with the oil and gas sector, including current and expected oil and natural gas prices; exploration and development costs and delays; reserves discovery and decline rates; pipeline and transportation capacity; weather, health, safety and environmental risks; integration of acquisitions, competition, and uncertainties resulting from potential delays or changes in plans with respect to acquisitions, development projects or capital expenditures and changes in legislation including, but not limited to, tax laws, royalties, incentive programs and environmental regulations; stock market volatility and the inability to access sufficient capital from external and internal sources; operations in foreign jurisdictions; general economic, market or business conditions; global economic events; changes to PentaNova's financial position and cash flow; the availability of qualified personnel, management or other key inputs; currency exchange fluctuations; changes in political and security stability; risks and uncertainty related to distribution and pipeline constraints; and other unforeseen conditions which could impact the Company. Accordingly, readers should not place undue importance or reliance on the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive.
Statements, including forward-looking statements, contained in this news release are made as of the date they are given and the Company disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
Additional information on these and other factors that could affect the Company's operations and financial results are included in reports on file with applicable securities regulatory authorities and may be accessed under PentaNova's profile on SEDAR at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE PentaNova Energy Corp.
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