Sintana Energy Announces Amendment of Asset Purchase Agreement

TORONTO, ONTARIO--(Marketwired - July 21, 2014) - Sintana Energy Inc. (TSX VENTURE:SNN) ("Sintana" or "Company"), a Canadian oil & gas company focused on exploration and development activities in Colombia, is pleased to announce that it has entered into an amendment to an Asset Purchase Agreement (the "Agreement") with Live Oak Holdings, Inc. and its wholly owned Colombia subsidiary, LOH Energy Sucursal Colombia, (together "LOH"). Under the amendment, and as a further step in the Company's efforts to high grade its asset base, Sintana will assign and transfer its participation interests in two non-core Colombia blocks to LOH. In addition, it will adjust its participation interest in the strategic VMM-4 Block in exchange for LOH bearing 100% of Exploration Phase II costs and to facilitate and accelerate execution of the License Contract Work Program.

In May 2012, Sintana completed a business combination with Colcan Energy Inc. ("Colcan"). The strategic driver of this transaction was obtaining a 100% participation interest in the VMM-37 Block in Colombia's highly prospective Middle Magdalena Basin. As previously reported, the combined conventional and unconventional unrisked oil and gas resources on this block are estimated, net to Sintana, at over 200 million barrels of oil equivalent (MMBOE).

In November 2012, ExxonMobil agreed to pay 100% of VMM-37 Exploration Phase I well costs (3 wells). A consideration was paid to compensate Sintana for past expenses connected with the block. Work Program warranties to meet ANH requirements became the responsibility of ExxonMobil. ExxonMobil has an option to proceed to the next phase of the unconventional project. In this Development Phase, it will pay 100% of the additional costs to a maximum of US $45 million, of which US $10 million will be recouped by ExxonMobil from 50% of Sintana's production proceeds. Once these carry commitments are met, Sintana will assign seventy percent (70%) of the participating interest, rights and obligations and the operation of the VMM-37 Block to ExxonMobil for the exploration and development of unconventional oil and gas resources underlying VMM-37.

Sintana will retain the remaining 30% participating interest in the unconventional resources as well as its current 100% participation interest in the conventional resources overlying the top of the unconventional interval.

As a result of the Colcan transaction, Sintana inherited carried 25% participation interests in three additional Colombia blocks, VMM-4, VMM-15 and LLA-18, each operated by LOH and purchased by Colcan via the original Agreement. At the time of the business combination with Colcan, Sintana classified these blocks as non-core.