PRESS RELEASE

Prospective resources in Chuquisaca of 400 TCF's and 20 MMbbl in Miraflores area

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Wednesday, August 1, 2018

This press release from Bolivia's Ministry of Hydrocarbons was published using an automatic translation system.

In the presence of President Evo Morales and the Minister of Hydrocarbons, Luis Alberto Sánchez, the companies YPFB Corporación, YPFB Chaco and the Canadian company Cancambria Energy Corporation, signed the document "Study Agreement for the Assessment of the Hydrocarbon Potential of the Reserved Area in favor of YPFB, Miraflores ", which is estimated, by preliminary studies, would have 400 TCF's of natural gas and 20 million barrels (MMbbl) of oil. "This block called Miraflores, is located in the municipality of Macharetí, Luis Calvo province of Chuquisaca department (...) Our great wish is that from here to two months maximum, the contract is being signed," said President Morales, this Wednesday in the city of Sucre, during the signing ceremony.

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The CEO of Cancambria, Christopher Cornelius, said: "Our objective with this Study Agreement is to confirm the large-scale potential of the Chaco plain and prepare economically viable plans for the development of resources based on our preliminary studies of reports, records and laboratory analysis of nuclei, we estimate -in situ- about 400 TCF of natural gas only from the Miraflores area, and that probably in the whole Chaco region are even more. (...), We hope to drill an exploratory well in the coming months, to test the potential of the Iquiri, Huamampampa, Icla and Santa Rosa formations, in the 350m thickness determined by the Texaco company by drilling two wells in the 90s In this way we can confirm the distribution of the extensive gas system in the Miraflores region and adjacent areas south of the Chaco plain, as is the case in many of the s main gas producing fields in the country ".

For his part, Minister Sánchez stressed: "What is signed today must be something historic, the greatest of the last 50 years, 100 years (...) In the Miraflores area they estimate that there are resources of 400 Trillion Feet Cubic (TCF's), that's incredible "and for a better understanding of the potential of the Area, compared the resources of Aquio - Incahuasi that is in the order of the 3 TCF's. "In Miraflores we talk about resources not reserves." He also reported that the estimates reveal the existence of 20 million barrels of oil in the area.

Sánchez recalled the reactivation of hydrocarbon investments in Chuquisaca, a fact reached after an agreement between the national government and Chuquisaca, in which the total investment of $ us2.514 million in the exploration and exploitation of hydrocarbons in Chuquisaca was agreed. "All thanks to the drive and support that our president gives us, this is what Chuquisaca deserves, this is what Bolivia deserves."

Miraflores is one of the largest gas potential areas in the world. The first exploratory well has been projected for the first quarter of 2019, with an initial investment of approximately $ 20 million and a depth of more than 4,500 meters.

Investments, Income and Production in Chuquisaca

President Morales made a summary of the investments and income in the department of Chuquisaca. He pointed out that investments in neoliberal times were between $ us4 to $ us5 million, while between 2006 and 2017 $ us867 million have been invested. "Now, we have guaranteed $ us2.514 million until 2021.

He said that in 2005, production in the department of Chuquisaca was 0.71 million cubic meters per day (MMmcd), while in 2017 it was 6.5 MMmcd.

The income received by the Department of Chuquisaca for IDH and Royalties, from the privatization of YPFB until 2005 was US $ 42 million, while in the period 2006 - 2018 it reached US $ 1,435 million. In 2004, the department's royalties were $ us5 million. Morales said: "In 2003, our bench with 27 deputies and 8 senators proposed a bill to amend the Hydrocarbons Law where we asked for 50% of royalties, those royalties have become the so-called IDH, and in 2005 it increased to $ us17 million in the department of Chuquisaca ", informed President Morales. The best year of the oil rent was 2014 with $ us245 million.