Exploration & Production | Operational Updates
Stetson Oil and Gas Updates Llanos 11 Farm Out Status
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Stetson Oil & Gas Ltd. has provided an update with regards to the Llanos-11 block acquired during the Ronda 2010 bidding process which the company subsequently farmed out to a third party company.
Stetson reports that the Colombian regulator has called down the outstanding letters of credit which were posted as a part of the initial exploration work program obligations. A description of the letters of credit is set out in Stetson's most recent annual and interim financial statements and MD&A.
The letters of credit were posted as part of the farm-out agreement whereby an independent company acquired a 90% interest in exchange for funding the obligations associated with the exploration block, including financial obligations. Due to the failure of the partner to meet the required obligations, Stetson terminated the farm-out agreement in October 2013. The partner advanced all of the funds for the letters of credit.
The company does not anticipate any further immediate follow up on this matter and will update shareholders, as necessary, as a part of its continuous disclosure.