Loss-making oil and gas company Alange Energy Corp said it would farm out two of its properties located in Catatumbo Basin in Colombia, to YPF, Argentina’s biggest energy company, for up to $123 million.
Under the deal, YPF will pay $23 million in exploration costs for Alange’s Carbonera property over the next three years. Alange will retain a 36 percent beneficial working interest in the property.
The company also farmed out its Catguas property to YPF for a work program that could total $100 million over the next three to five years.
YPF will get a 35 percent interest in the Northern area of Catguas in which Alange held a 50 percent stake originally. The Argentine company will also get a 10.5 percent interest in the southern area of Catguas in which Alange held a 15 percent interest.
It will also pay Alange $5 million cash. YPF has the option to raise its stake in the Catguas under certain conditions.
Alange has been posting losses for the past four quarters and started restructuring its operations in January.
The company, which has more than 1.2 million acres of property in Colombia, said it would continue talks with other parties to farm out, or dispose of its interests in other assets.
Shares of the Canadian company rose 5 percent in early trade on Monday on the Toronto Venture Exchange, but shed the gains later and were trading flat at 21.5 Canadian cents.