To buy subsidiary with operations in Upper Magdalena Valley & Llanos regions, gaining 22,000 BOE/d.
Colombian producer Ecopetrol S.A., Bogota, (NYSE: EC) plans to acquire Hocol Petroleum Ltd., the Colombian subsidiary of French company Maurel & Prom, Paris, (Paris: MAU) for US$748 million. Ecopetrol will pay US$580 million in cash and $168 million in working capital. The transaction has an earn-out based on the level of proved plus probable reserves of Huron Field in the Niscota license and an earn-out linked to the level of the future oil price. Hocol operates in the Upper Magdalena Valley and Llanos regions. 2008 production was 15,358 barrels of oil equivalent per day. As of the end of January, production was 22,000 barrels per day. Most production comes from the San Francisco, Balcon, Palermo and La Hocha fields in Huila Province. Hocol also has assets in the Eastern Plains region in the Casanare, Estero, Garcero, Orocue, Corocora and Guarrojo contract areas. The acquisition includes shares in the Upper Magdalena Pipeline (36.12%) and in Oleoducto de Colombia (21.72%). Ecopetrol operates in Colombia, Brazil, Peru and the Gulf of Mexico. The effective date is Jan. 1, 2009.