News and AnalysIs for

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).

(The USO is the Colombian petroleum workers union. Unrepentantly radically left, it often seems trapped in some Marxist-Leninist twilight zone from before the fall of the Berlin Wall or perhaps before the Second World War. Still its capacity for mischief is unmistakable and so we believe it is important for oil and gas industry stakeholders to keep track of what they up to. We will summarize major news items from their webpage or other sources and publish the summary every Monday. We will reproduce the tone of their items while not agreeing with their messages. )

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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.