PANORO ENERGY - Santos Basin Block BM-S-71

Project Status:

As of mid September 2011, Panoro Energy ASA, the independent oil and gas company with assets in West Africa and Brazil provides an update for its block BM-S-71 (formerly SM-1035).

On behalf of the partnership, Panoro Energy has signed a letter of intent ("LOI") with Transocean for the GSF Arctic I semi-submersible drilling rig to drill three wells. The completion of a rig contract is subject to final negotiations, which are expected to be completed by the end of July 2011. The GSF Arctic I semi-submersible rig is currently operating in Brazil and is expected to be available to commence drilling in Q1-2012.

As part of the preparations for drilling three exploration wells on blocks BM-S-63, BM-S-71 and BM-S-72 in the Santos Basin offshore Brazil, Panoro Energy has recently completed a site survey covering the drilling locations for the Sabia, Canario and Jandaia prospects. 

The site survey included mapping the seafloor for optimizing drilling rig placement, surveying the shallow subsurface and collecting samples from the water column and seafloor for environmental permit requirements. On behalf of the partnership, Panoro Energy has now submitted the application for drilling to the environmental agency, IBAMA. Drilling start-up is contingent upon approval from IBAMA.

As of end December 2011, Panoro Energy has completed the farm-out of blocks BM-S-63, BM-S-71 and BM-S-72 in the Santos Basin.

In January 2011, Panoro Energy announced that the Company had reached agreement to farm out 35 percent of Panoro's 50 percent interest in its three shallow water exploration licenses BM-S-63 and BM-S-71 and BM-S-72.

With the completion of the transaction, Panoro Energy has now received $14.5 million for historical costs on the blocks. Furthermore, Vanco will finance Panoro's remaining 15 percent share of drilling costs for three exploration wells, one on each license.

The drilling campaign on these licenses is expected to start during the first half of 2012, comprising the drilling of the Sabiá, Canario and Jandaia prospects.

Vanco Brasil, a wholly owned subsidiary of PanAtlantic Energy Group, has commenced drilling operations, using the GSF Arctic I semi-submersible drilling unit, for its three-well drilling campaign on blocks BM-S-72 (SM-1100), BM-S-63 (SM-1036), and BM-S-71 (SM-1035), in the Santos Basin, offshore Brazil.

PanAtlantic, through its Brazilian subsidiary Vanco Brasil Exploração e Produção de Petróleo e Gás Natural Ltda., holds a 70% participating interest in the concessions, together with Panoro Energy do Brasil 15% and Brasoil Round 9 Exploração Petrolífera 15%.

As announced in May 2012, PanAtlantic Energy Group has succeeded and replaced Vanco Overseas Energy Group, with the name change to reflect its major asset base and areas of focus along the Latin American and African margins of the Atlantic Ocean.

PanAtlantic holds deepwater exploration assets in Brazil, West Africa and the Black Sea.(Topco)