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Ecopetrol and PanAtlantic agree farm-out deal

Oilfield Technology,

Ecopetrol Óleo e Gás do Brasil Ltda, a wholly owned subsidiary of Ecopetrol S.A., and Vanco Brasil Exploração e Produção de Petróleo e Gas Natural Ltda, a wholly owned subsidiary of PanAtlantic Energy Group, are pleased to announce that the companies have reached an agreement in which Ecopetrol Oleo e Gas do Brasil Ltda will acquire a 30% interest in three exploration blocks BM-S-72 (formerly SM-1100), BM-S-63 (formerly SM-1036), and BM-S-71 (formerly SM-1035), in the Santos Basin, offshore Brazil. In line with Brazilian petroleum legislation, the transaction is subject to approval from the National Petroleum Agency.

Following this transaction, PanAtlantic will, through its Brazilian subsidiary, retain a 40% working interest in the concessions and continue as Operator for the three-well drilling campaign, which commenced on 7 July 2012 with the drilling of the Sabia-1X well in BM-S-72. Additional interests are held by Panoro Energy ASA 15% and Brasoil Round 9 Exploracáo Petrolifera Ltda 15%.

PanAtlantic CEO William T. Drennen comments, “We are very pleased that Ecopetrol shares our view of the Santos Basin as an exciting exploration region and will join us in the 2012 drilling campaign.”

Adapted from press release by Peter Farrell.

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