News and AnalysIs for

Petrodorado filed its 3Q12 financial results and MD&A. The company had no production because its only productive block, Moriche, was shut in pending a sale expected to be completed in 4Q12. Thus the focus is on exploration. The company has provided frequent updates on its activities and most are still at early stages. The most advanced is the Dorado-1X well in the Talora block which is in testing but with nothing to report yet.

Interoil published its 3Q12 results and they were not encouraging. There was a net loss in the quarter of US$7.1M and year to date Net Income is down by about 2/3 from 2011. Earlier we documented the continuing decline of Interoil’s Colombian production. Near the bottom of Interoil’s 3Q12 results was the statement “The production decline is a direct result of reduced investment activity due to liquidity constraints. To address this issue, the board has initiated a sales process in Colombia”.

National business newspaper La Republica reported that Ecopetrol says that despite the attacks of 17 November to Transandino pipeline, management expects to meet its goal of producing around 780,000 bpd on average by the end of this year. Note that this figure is likely production before royalties (see our November Monthly Report). We estimate it is the equivalent of about 655,200 bpd as usually measured (Net of Working Interest and Royalties).

Shona Energy Corporation reported its 3Q12 results. Production was up 22% sequentially to just over 16MMcf/d. EBITDA was up 43%. Year-over-year comparisons are dramatic but not really meaningful as the company was just getting production going last year. The company reported Net Earnings Per Share of 1 cent vs a 2 cent (US$) per share loss last year in the same period.

Sintana Energy recently announced a deal with ExxonMobil for the VMM-37 block (in the Middle Magdalena basin) where by the company would keep any conventional resources found on the property but farm-out the unconventional resources to ExxonMobil Exploration Colombia. ExxonMobil would have a 70% share in return for shouldering the exploration costs. Now Sintana has published estimated reserves and the unconventional play is likely 4 times the conventional play just looking at Sintana’s share. In the block as a whole there are estimated to be 14 times as much unconventional play resources as conventional play. The chart shows the range from the “Low” Case (P90) Case to the “Best” Case (P50).

Rumors had flown all weekend – many of them wrong – but the news hit early morning from C&C Energy (aka CyC Energia). Pacific Rubiales will buy the production assets and Llanos exploration blocks of the company in return for PRE stock. The company’s Putumayo and Middle Magdalena exploration assets will go into a NewCo, jointly owned by C&C’s current shareholders and Pacific Rubiales. C&C shareholders get Pacific Rubiales stock, NewCo stock and $0.001 per share.

Source: Yahoo Finance, Hydrocarbons Colombia

Colombian oil stocks started to creep up on Friday afternoon then shot up at the end of trading. Most stocks jumped when the market opened on Monday and then drifted around after the C&C Energy/Pacific Rubiales announcement to finish as seen in the chart. Only one stock finished lower (Petrodorado) and one stock (Suroco) had its run up entirely on Friday afternoon and opened lower on Monday rather than higher.

As reported by the website dinero.com, the number of visitors from Asian countries to Colombia increased significantly in 2012. Compared with the same period of 2011, the Finnish visitors increased 57%, 35.2% Chinese, Koreans 31% and Japanese 26.9% so far in 2012. This is because trade relations with these countries have considerably strengthened through the work of the Ministry of Commerce, Industry and Tourism.

Chilean company GeoPark reported its 3Q12 operational results which highlighted the importance of the company’s acquisitions in Colombia this year. (It bought Winchester Oil & Gas in January and Hupecol in March.) This quarter these new Colombian assets produced more oil than did GeoPark’s principal assets in Chile. However, Chilean operations produced over 21,000 MCFPD which when translated into equivalent barrels of oil meant the home country still lead in boepd.

Just a few short weeks after filing its fiscal year-end results, Canacol reported its 3Q12 calendar (1Q13 fiscal) results and the story was not a happy one. Revenues were down and the company reported a net loss of US$6.2M, its worst since 2010. Revenues were down because production was affected by a number of community blockages. The shift from so-called “Tariff” to normal production (which the company labels NRI) in the Rancho Hermosa block also had an impact.