PentaNova announced on 21 June 2018 that it has signed a definitive agreement with LATAM Oil & Gas Corp (LATAM) subsidiary, Panacol Oil & Gas, to sell half of its 80% WI in the SN-9 Block located in the Lower Magdalena Valley under the same terms as the original LoI signed with American Oil. In return, Panacol will fully fund PentaNova's commitments during the first phase of the SN-9 E&P contract for the amount of US$ 22.29 million, subject to ANH approval. The agreement is expected to close within the next 30 days during which time Panacol will be required to place US$ 3.0 million in escrow to fund near-term activities. Panacol is also required to pay approximately US$ 650,000 in past costs and provide a standby letter of credit for US$ 3.0 million to guarantee further payments into the escrow account. PentaNova will reimburse 50% of the funds invested by Panacol in the Phase I activities from 70% of the proceeds of PentaNova's net production. PentaNova previously reported on 28 September 2017 that it had entered into a Letter of Intent (LoI) with American Oil and Gas (American Oil) to farm-out half its stake in the SN-9 Block. An assignment agreement was signed in April 2018, between American Oil and LATAM, approved by PenaNova, for the assignment of all rights and obligations as outlined in the LoI to LATAM, which was then reassigned to its wholly owned subsidiary Panacol. LATAM may itself be a subsidiary of LATAM Energy Corp, a Canadian company focused on Colombia, but without any notable assets to date in the country. PentaNova itself farmed in during January 2017. The remaining interest is held by Mexican company Desarrolladora Oleum SA de CV with 15% WI and Colombian CleanEnergy Resources SA (owned by CEREX SA) with the remaining 5% WI. PentaNova believes that the gas play being developed by Canacol in the neighbouring Esperanza Block extends into the south eastern portion of the SN-9 block, based on 2D seismic and one discovery well, Hechizo-1, drilled in late 1992 to early 1993 that tested a combined rate of 10.3 MMscfg/d. The company has emphasised that this will be the immediate focus of activity. It is planning to acquire 140 sq km of 3D seismic in October-November 2018 and the first exploration well in mid-2019.
American O+G has acquired 40% interest in SN 9 block from PentaNova (->40%, Desarrolladora 15%, 5% Clean Egy).