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Pacific Rubiales tries to calm the press over the Quifa case

The ‘Qifa case’ has acquired a life of its own. This lawsuit between Pacific Rubiales and Ecopetrol turns on a clause that triggers an increase in Ecopetrol’s participation once production hits a certain level. The fight is over whether the trigger is defined by total production or just Pacific Rubiales’ net production. So much has been published on such little understanding that a number of ‘myths’ have arisen that Pacific has gone public to deny.

Monday, March 11th, 2013
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Hopefully Interoil gets relief from shareholders

Hopefully Interoil gets relief from shareholders

Interoil, operator of a number of Colombian oil blocks got approval from its shareholders to raise US$35M from existing and other investors. The equity is necessary to meet the requirements of bondholders to restructure and extend the company’s debt. The equity will be raised through a crash private placement that will close March 13, 2013. According to a company presentation, Interoil had US$97M of debt and US$10M in cash as of December 31, 2012 and it is using all of the proceeds from production in Peru and Colombia to pay for its debt. It is unable to invest in expanding production because of the debt load.

Thursday, March 7th, 2013
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Ecopetrol generates over 36000 jobs in Colombia mostly local hires

Ecopetrol continues its publicity campaign about local employment and procurement. This time it is the turn of employment, highlighting how many jobs the company creates and how many are filled with local people. With local hiring being a developing community issue, this Ecopetrol press release is timely. Translated and with commentary by Hydrocarbons Colombia.

Thursday, March 7th, 2013
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A forgetable 2012 for Petrominerales

A forgetable 2012 for Petrominerales

Petrominerales announced its 2012 results this morning and had its conference call at 10:00 am Eastern. At the close, the share price in Toronto was down 8.4%. The company declared a Net Loss of US$54M in 4Q12 versus a profit of US$77M in 2011. For the year the company turned a profit of US$102M but that was 69% less than in 2011. The problem was production which was down 29%. This was offset by higher oil prices and better netbacks so funds from operations were only down 18%. As the graph shows, additions to reserves were minimal meaning 1P (proven) reserves are down 15%.

Wednesday, March 6th, 2013
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Talisman gives upbeat guidance for Colombia

Talisman published its annual guidance for 2013 as a consequence of its annual investor open house. Although the company is looking to divest assets with longer-term payoffs, it seems to like its Colombian properties, giving them prominence in the presentation and directing significant CAPEX to 2013 activities in the country. The company also highlighted its investment in Ocensa, which has recently changed its business model from a cost center to a profit center, but this is one of the assets which Talisman would consider selling.

Wednesday, March 6th, 2013
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Pacific Rubiales became majority owner of Pacific Infrastructure Inc.

As business newspaper La Republica reported, the Panamanian company Petro Rubiales Corp., a subsidiary of Pacific Rubiales, acquired the majority of shares (50,19%) of the also Panamanian company, Pacific Infrastructure Inc. Petro Rubiales Corp. invested a total of US$2,207,802.85 for 2,324,003 shares at a value of US$ 0,95 each. Thus, Pacific Rubiales gained control over Pacific Infrastructure Inc.

Tuesday, March 5th, 2013
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Ecopetrol emphasizes local suppliers

This Ecopetrol press release details the company’s local procurement activities by region. Local procurement has become an issue because the communities in which oil and gas companies operate have lost line of sight to the benefits having hydrocarbons activity in the vicinity. The costs – like roads clogged with tanker trucks – are readily apparent but since the reform of the royalties distribution system, only local procurement is a sure route to jobs. Translated and with commentary by Hydrocarbons Colombia.

Tuesday, March 5th, 2013
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Pacific Rubiales Colombian 2012 proved reserves lower than 2011

Pacific Rubiales Colombian 2012 proved reserves lower than 2011

Firstly, Pacific Rubiales shareholders should not be concerned. Management did its job and proved (1P) and probable (2P) reserves both increased over 2011 thanks to the Z-1 Block in Peru and the acquisitions of PetroMagdalena and C&C Energy in Colombia. The company has made strategic plays in Papua New Guinea, Guatemala and Guyana that are not yet reflected in either proved or probable reserves. But stepping back and looking at the Colombian results to understand what is happening with the industry as a whole, the picture is far less rosy, as seen in the above graph.

Monday, March 4th, 2013
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Terpel will invest about US$895 over the next five years

As reported by National business newspaper Portafolio, Fitch Ratings Colombia, a rating agency, estimated that the company Terpel will invest US$895 in the next five years, due to expected increases in sales.

Monday, March 4th, 2013
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Gran Tierra hurting in 4Q12 from TransAndino problems

Gran Tierra hurting in 4Q12 from TransAndino problems

Gran Tierra published its 4Q12 and full year 2012 results. As can be seen from the graph, 4Q12 was not a great quarter for Colombian production. The company reported lower production and higher transport costs due to the disruption of the TransAndino pipeline. Although much of the country enjoyed the Farc’s unilateral truce in 4Q12, the guerrilla’s parting gesture was to blow up the pipeline just before announcing the ceasefire. This was a major disruption that was still unrepaired in mid-December and the result can be seen in production.

Thursday, February 28th, 2013
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