News and AnalysIs for

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.

The big news was what appears to be a significant find at La Casona-1 in partnership with Petroamerica. The company reports “1,300 bopd of 36 degree API light oil and 4.0 million cubic feet per day (“MMCFD”) of natural gas” from the La Casona-1 well. Third quarter results were flat with respect to 2Q12 but significantly higher than the same quarter last year.

In a press release, Sintana Energy announces a farm-out arrangement with ExxonMobile Exploration Colombia. The farm-out is for block VMM-37 in the Middle Magdalena Basin but only applies to unconventional plays on the block. For these ExxonMobile will earn a 70% interest on completion of the agreed work plan. Sintana retains 30% of an unconventional play and 100% of conventional production.

CyC Energia aka C&C Energy reported results for 3Q12. Production was up just under 9% but revenue was up over 1/3 because the company managed to reduce inventories by over 3,000 bpd.

Interoil reported its October 2012 production results for Colombia without commentary. Colombia’s oil production rose in September and October but Interoil’s share dropped. In fact, except for a brief blip in July, production has dropped continuously since March.