Sintana Energy Inc has told investors it has reached an agreement with ExxonMobil to resolve arbitration linked to the VMM-37 block in Colombia.
The company said its subsidiaries, Patriot Energy Oil and Gas Inc. and Patriot Energy Sucursal Colombia, have agreed terms with ExxonMobil Exploration Colombia Limited and its Colombian branch, to resolve the dispute which related to the VMM-37 block in Colombia’s Middle Magdalena Valley Basin.
Sintana said Patriot and ExxonMobil will dismiss the current arbitration. Patriot has agreed to conditionally assign all of its rights and interests associated with VMM-37 to ExxonMobil, and the American major agreed to make two cash payments to Patriot - the first of which, US$3 million, is due within 60 days of the agreement.
The company noted that a second payment of $6 million will follow, conditionally, subject to Colombian government approval and other contractual requirements.
"We are pleased to bring this matter associated with our legacy position in Colombia to an initial conclusion," said Sintana chief executive Robert Bose.
"This outcome supports our efforts to streamline operations focusing resources on our active, high impact portfolio across the Atlantic margin."