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  • Columbia Basins Poised For Exploration And Perhaps Takeovers 7 comments
    Mar 15, 2014 6:54 PM | about stocks: EC, PTAXF, PARXF, CNNEF, PEGFF, GTE

    The Oil industry is set to spend $750B in 2014. You may not be aware the Toronto Stock Exchange is the #1 market for Oil & Gas Listings globally. In fact, in 2012 $9B of the equity capital raised on Toronto Stock Exchange (and its venture exchange) was purely for Oil and Gas stocks. $28 Billion in shares also traded hands back in 2012 for just Oil and Gas on the TSX.

    Consider also, that today there are 11 Companies on the TSX big board from South America, and its smaller board the TSXVenture or TSXV also holds 22 (+/-) Companies from South America.

    Further consider nearly 50% (20/37 oil companies) listed on TSX and TMX from latin america are located in "Columbia". Okay, you got through the intro, now lets go to latin america.

    Why so many jr oil companies from Latin America are exploring for light and heavy oil in Columbia is because of the 2 seas (Carribean, Pacific) it is situated beside for ease of export and the reward of the higher than avg. net backs from the many great oil basins that reside there.

    Colombia is located in northwestern South America, bordered to the northwest by Panama; to the north by the Caribbean Sea; to the east by Venezuela and Brazil; to the south by Ecuador and Peru; and to the west by the Pacific Ocean. Land Area: 1,141,748 km²
    Capital City: Bogota, Population: Appox. 46,366,364 million (Feb 2012 est.).

    I left out Pacific Rubiales on purpose (which is the largest independent oil and gas producer in Latin America). In 2012 it had Revenue of $3.9B. Its 2012 Reserves and Resources were 514 million boe 2P reserves (78% of which is proved) and 4.3 billion boe certified Prospective Resources.

    In its Exploration Portfolio Pacific Rubiales has over 22 million gross acres (14.4 million net), 75 exploration and E&P blocks,Diversified across country and geological risks. That is alot of land, and alot of oil reserves to grow from, so they are the potential that exists to strive towards.

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    (Most of PRE reserve growth is from Columbia)

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    The others companies listed above are rather well known at least in Canada to followers of the TSX. Ecopetrol investors are up 117% from 2009 to 2014 mainly due to success in Columbia.

    (Ecopetrol)

    (Ecopetrol)

    The story I want bring up is how attractive these emerging basins are to the smaller jr. companies who can build and grow production, very fast especially with modern Canadian technologies.

    Then look to Canacol Energy Ltd. as an example, they have had 100% success on 13 wells drilled in the Rancho Hermoso field since 2008. (see slide 7 below in their presentation). 78% of their capital spending is also in Columbia. They are poised to triple (300%) production from existing 2P reserves over the next 3 years. If that isn't enough, they also have $55 Million slated for even more exploration this year. Starting to see where this is leading...Columbia is in a boom.

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    Remember earlier when i quoted that 20/37 latin american O&G companies listed on TSX are focused in Columbia, well one of those is above is called Parex Resources Inc. and it has doubled its 2P reserves from 2012. Its focused in the LLanos Basin and their goal for 2014 is to hit 18,000 BBL/Day. They have 32MM BOE of 2P reserves (Dec 2013),

    It's interesting that just last week (March 6, 2014) Parex announced a 'Farm in' arrangement to the "El Porton Block" of junior exploration company "PetroAmerica" listed as PTA on the TSX.

    Parex obtained a 50% working interest and operatorship on the Exploration Area within the El Porton Block and Parex has agreed to pay PetroAmerica 80% of the dry-hole cost for Crypto-1, the next exploration well to be drilled on the block.

    This action translated to a $17 million adjustment to PetroAmericas 2014 exploration budget, reducing expenditures in 2014 from $70 million to $53 million.

    As March 1, 2014 they reported to have $95 million in cash on their balance sheet. That cash is 54% of fridays Market Cap, (of $175,568,737) meaning PetroAmerica is fairly cash rich at the moment. Petroamerica has 5.1MM BOE of 2P reserves but is due for a update in April on its reserves before its April 28th Annual Meeting.

    You will find this El Porton Block on slide 10 of Parex Resources Inc. (i included the slides from investor presentation below if you scroll down) and view slides 9,11,12,13, of PetroAmerica's investor presentation (also included below).

    The compelling part is Petroamerica is adding alot of cash to its balance sheet every month from its successful Las Maracas wells, which are right now nearly 95% of the company cash flow.

    Speaking of cash, they are sitting on quite a pile of cash, and the 'farm in' deal indicated above just saved them a bunch more which is leaving followers to speculate whether they might be a take out target before year end 2014?

    The arguments against that idea might be that they are a one basin story until future exploration wells confirm other oil plays. Plus they also have an enormous amount of options and warrants (see below) that could be triggered to dilute the existing number of shares. Lastly, insiders own upto 7.8% of these option instruments and may not want to cash out if they discover an elephant sized oilfield.

    In the hypothetical situation of a future takeover, a reverse split type event on so many outstanding shares and the outstanding options and warrants could make this quite a bit more expensive for any proposed buyers. Yet, this is what make the story compelling and worth following going forward in 2014.

    By mid April, a new reserve estimate is expected, and if successful it may show increased reserves, and be out in time for the annual meeting on April 28. The May 9th warrants are set to expire a week or so after the annual meeting.

    The appraisal well in Q1 '14 was not a success, yet the recent Crypto-1 well is still due to spud in Q2. So there are lots of upcoming events and conversations that can be drummed up about what could or may happen given all the elements playing out in Columbia.

    It's a bit early to speculate, and better to wait and see the next 2P reserves update (expected out in mid April), and the outcome of the Q2 exploration well. However the merits of both these companies (Parex and Petroamerica) below is starting to show up on investors radar screens as emerging basins with serious production potential for 2014 and beyond. Especially when you look backwards at earlier juniors like Canacol and others who have had a tremendous run the past few years in similar geological plays.

    There has never been a more exciting time to follow Columbia.

    One more recent oddity is that Tuscany Drilling who had a fleet of rigs in Columbia (most of which were less than 5 years old), that have drilled for Parex, and PetroAmerica and others in the past...unfortuneately just filed a Chapter 11 due to debt problems.

    TIDZQ : OTCBB

    TID : TMX.com

    (sample filing at sedar)

    (click to enlarge) $32MM of Tuscany Earnings were from Columbia.

    So in a short period some of their rig inventory sitting in Columbia may be sold off at upto 65% discount. It would go through a bidding process in the courts, but it is an interesting speculation idea at this time. With all the cash all the Columbia companies have like Parex and PetroAmerica, it's remotely possible that competing bids for certain drilling equipment could end up changing hands to an oil exploration company in country and would make for some changing dynamics due to the cost and availability of such equipment. 40% of their (Tuscany) revenue was previously coming from Columbia.

    Most of PetroAmerica's current oil production from Las Maracas field was drilled by top drive rigs, like Rig #109 shown below.

    Tuscany may have operated the Rig, but it was manufactured by Drilling Structures International. Classified as a 'Triple', its capacity of 1500 Horsepower is provided by 3 Caterpillar 3512C's, an 3 SRB3's. Units like these may become auctioned off as the creditors handle the restructure of Tuscany and there will be a lot of interest in this machinery because its rather new, and its fit for purpose to be put to work in Columbia.

    This cat horsepower and the substructure rig design is rated to handle upto 800,000 lbs of drill pipe, or 1,800,000 lbs of casing. An electric cantilever rig is faster to set up than rigs that require crane operators, so its idea for multi-well pad drilling on locations like found in the basins of Columbia.

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    Lets be clear, I'm not saying this will ever happen, or even that its in the cards, just that it adds an interesting discussion topic for the water cooler when you look at Columbia from all its various angles.

    Enjoy the next few months. It should get interesting.

    ---List of Investor Presentations---

    PAREX PRESENTATION

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    [END OF PAREX]

    BEGIN: PETROAMERICA

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    (See below for Investor Caution Text from Slide 21)

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    (Text from Slide 21)

    This investor presentation contains information thatmay be considered to be forwardlooking

    information within the meaning of applicable securities laws. Such forwardlooking information relates to internal projections, expectations, estimates or beliefs relating to future events or the future performance of Petroamerica Oil Corp.

    ("Petroamerica"). All statements contained herein, other than statements of historical fact, may be forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", consistent with historical experiences, anticipated results of exploration & drilling

    activities, the time required to complete the planned seismic & drilling programs & the price of oil.

    The forward-looking information contained in this investor presentation involves known & unknown risks, uncertainties & other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information.

    Petroamerica's seek , anticipate , plan , actual results could differ materially from those anticipated in the "continue", "estimate", "expect", "may", "will", "project", "predict", "propose", "potential", "targeting", "intend", "could", "might", "should", "believe" & similar expressions.

    These statements are only predictions & actual events or results may

    differ materially. Although management of Petroamerica believes that the expectations reflected in the forward-looking information contained in this investor presentation are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject

    to significant business, economic, competitive, political & social uncertainties & contingencies Therefore investors should not unduly rely on the forward looking forward-looking information contained in this investor presentation as a result of the following risk factors: volatility in the market prices for oil & natural gas, increases in operating costs, unanticipated changes in Colombia's royalty regime, uncertainties associated with estimating resources & reserves, geological problems, technical problems, drilling & seismic problems, liabilities & risks including environmental liabilities & risks inherent in oil & natural gas operations, fluctuations in currency & interest rates, incorrect assessments of the value of acquisitions, unanticipated results of exploration & development drilling & related activities, competition for capital, contingencies. Therefore, forward-information contained in this investor presentation as actual results may vary. The forward-looking information is provided to allow investors to get a better understanding of Petroamerica's operating environment &, as such information relates to projected netbacks, the projected economics thereof.

    However, readers are cautioned that it may not be appropriate to use such forward-looking information for any other purpose.

    In particular, this investor presentation contains forward-looking information, pertaining to the following: Petroamerica's long term strategy the development size & p p g , p p , competition for acquisitions of reserves and resources, competition for undeveloped

    lands, competition for skilled personnel, unpredictable weather conditions, the impact of general economic conditions & political conditions in Colombia, industry conditions including changes in laws & regulations including adoption of new environmental or tax laws & regulations, the possibility of future financings & divestitures, expectations regarding future production & changes in how they are interpreted & enforced in Colombia, obtaining required approvals of regulatory & government authorities in Colombia, risks associated with negotiating with foreign governments as well as Petroamerica s strategy, development, country risk associatedwith conducting international activities timing of Petroamerica's opportunities in Colombia through exploration & drilling activities, expectations of future production & reserve growth & construction of facilities, sources of capital, the opportunities that may exist for Petroamerica in Colombia, the estimated costs of Petroamerica's contractual commitments including its commitments to pay for seismic & drilling, the timing & results of drilling programs & projected netbacks per BOE. BOEsmay bemisleading particularly if used in isolation.

    A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip & does not represent a value equivalency associated with activities.

    For the purposes of the following, "Misrepresentation" means an untrue statement of a material fact, or an omission to state a material fact that is required to be stated, or that is necessary to make a statement not misleading in light of the circumstances in which it was made. If this presentation contains a Misrepresentation, a purchaser in Ontario who purchases securities of Petroamerica has, without regard to whether the purchaser relied on the

    Misrepresentation, a statutory right of action for rescission or, alternatively, for damages against Petroamerica, provided that no action shall be commenced to enforce a right of action more than (a) in the case of an action for at the wellhead.

    With respect to forward-looking information contained in this investor presentation, Petroamerica has made assumptions regarding, among other things: the legislative & regulatory environment in Colombia, the stability of the economy & political regime in Colombia, the impact of increasing competition in Colombia, that costs related to

    exploration, drilling, seismic & the development of oil & gas properties will remain rescission, 180 days after the date of the transaction that gave rise to the cause of action; or (b) in the case of any action, other than an action for rescission, the earlier of (i) 180 days after the purchaser first had knowledge of the facts giving rise to the cause of action, or (ii) three years after the date of the transaction that gave rise to the cause of action.

    PAST NEWS--

    Petroamerica Cases the La Guira-2 Appraisal Well For Testing

    Calgary, Alberta (January 20, 2014) Petroamerica Oil Corp. (TSX-V:PTA) ("Petroamerica" or the "Company"), a Canadian oil and gas company operating in Colombia is pleased to announce that the La Guira-2 appraisal well, located on the Los Ocarros Block, has been cased for testing.

    After the La Guira-2 appraisal well reached its target depth of 12,600 feet the well was logged and the decision was made to case the well for testing. Testing will be performed on the Mirador and Gacheta Formations using a work-over rig and will commence once the rig is secured and on site.

    The La Guira-2 well was drilled as a sole risk operation, and Petroamerica currently holds 100% of the working interest ("WI") in this well. The other 50% WI partner in the Los Ocarros Block does have the right to re-establish their WI position in this well subject to a penalty payment based on the total cost of this well.

    About Petroamerica:

    Petroamerica Oil Corp. is a Canadian oil and gas exploration and production company with activities in Colombia. Petroamerica produces more than 6,300 barrels of oil equivalent per day and has interests in five blocks, all located in Colombia's Llanos Basin. Petroamerica's shares are listed on the TSX Venture Exchange under the symbol "PTA".

    --NEWS

    Petroamerica Announces Farm Out of El Porton Block and Provides an Operations Update for its Activities in Colombia

    Calgary, Alberta (March 6, 2014) Petroamerica Oil Corp. (TSX-V:PTA) ("Petroamerica" or the "Company"), a Canadian oil and gas company operating in Colombia is pleased to announce a farm out of its El Porton Block and provide an operations update for its drilling and production activities in Colombia (note: all financial amounts are shown in United States Dollars unless otherwise stated).

    Company Production

    First quarter production levels remain strong with total company working interest production averaging 6,497 barrels of oil equivalent per day ("boepd") for the month of February, and 6,453 boepd for January 2014. More than 95% of this production is coming from the Las Maracas Field, which continues to outperform, averaging 12,417 barrels of oil per day ("bopd") (gross) for the month of February.

    Business Development and Strengthening Balance Sheet

    The Company is pleased to announce that it has farmed out a 50% working interest to Parex Resources Colombia Ltd. Surcusal ("Parex") in the Exploration Area of the El Porton Block, where Petroamerica currently holds a 100% working interest. To earn its 50% working interest and operatorship on the Exploration Area Parex has agreed to pay 80% of the dry-hole cost for Crypto-1, the next exploration well to be drilled on the block. Parex is expected to operate the well, which is anticipated to spud sometime during the second quarter, under a service agreement with the current operator.

    This farm out reduces the risk exposure to Petroamerica, and will result in a projected firm capital expenditure reduction for 2014 from approximately $70 million to $53 million. The Company is also pleased to report a continued strengthening of its balance sheet with a cash position of more than $95 million as of March 1, 2014, and as such, is currently evaluating opportunities that would strengthen and diversify the asset base.

    Appraisal Activities

    Following disappointing test results from the La Guira-2 appraisal well, the Company has taken the decision to suspend this well. Despite encountering the top Mirador and Gacheta reservoirs 10 feet higher than at La Guira-1, testing yielded oil and water at non-commercial flow rates. The Mirador formation swab-tested 37 degree API oil at average rates of 84 bopd under natural flow for 20.5 hours with the water-cut reducing toward the end of the test. However, following more extensive testing with an electro-submersible pump over a 79-hour period the well produced at an average rate of 61 bopd only and an average watercut of 92%.

    The Rumi-1 long-term test facility (40% Petroamerica working interest) is being constructed and this well is expected to be on-stream before the end of the second quarter. The Curiara-1 long-term test facility (25% Petroamerica working interest) is more than 70% complete and the long-term production test is expected to commence sometime during the month of April.

    ----------------------------------------------------------------------------

    P.S. (postscript for a quick added note to warrants)

    The .WT have no value unless an oil discovery or reserves increase create the conditions which allow the share price to go north of the published exercise price and before the expiry date. These warrant instruments seldom work out statistically speaking, but they offer leverage to participate in unlimited upside of success and are a method of cheap financing for the companies and banks who issue them.

    In this case you are putting a claim on buying a future share, each warrant gives you the right but not the obligation to buy 1 share at a specific price (the exercise price) for a limited period of time.

    If the conditions (share price at or = to exercise price) are not met by the expiry date the warrants expire worthless. So do your homework on these, by reading up on them before ever participating.

    [SLIDES from Pacific Rubiales - click to enlarge)

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    ---Blog Under construction -- not complete from this point---

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    (Canacol Energy Ltd - March 2014)

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    Gran Tierra Energy Inc.

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    (click to enlarge)(click to enlarge)(click to enlarge)(click to enlarge)(click to enlarge)(click to enlarge)(click to enlarge)(click to enlarge)(click to enlarge)(click to enlarge) skipped slides 22-26.

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Comments (7)
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  • haoleboy1967
    , contributor
    Comments (253) | Send Message
     
    Good article. Petroamerica is the the best buy in this sector. When i look at a company to invest in I always ask my self "would you buy the whole company at this valuation" and with PTAXF the answer is a resounding YES!
    Anyone want to pool our resources? ;)
    16 Mar 2014, 02:39 PM Reply Like
  • amy speers
    , contributor
    Comments (3) | Send Message
     
    Petroamerica Announces Approval of Normal Course Issuer Bid
    (buying back 10% of shares)

     

    5 hours ago - ACQUIREMEDIA
    CALGARY, March 24, 2014 /CNW/ - Petroamerica Oil Corp., (TSX-V: PTA) ("Petroamerica" or the "Company"), a Canadian oil and gas company operating in Colombia, today announced that the TSX Venture Exchange (the "Exchange") has accepted its notice to make a normal course issuer bid ("NCIB") to purchase outstanding Petroamerica common shares ("Common Shares") on the open market, in accordance with the rules of the Exchange.
    As per the Exchange approval, Petroamerica is authorized to purchase up to 55,175,760 Common Shares representing approximately 10% percent of Petroamerica's public float (as defined in the regulations and policies of the Exchange). As of March 21, 2014 there are 595,148,260 Common Shares outstanding of which 551,751,760 represents the public float.
    Petroamerica is authorized to make purchases during the period of March 24, 2014 to March 23, 2015 or until such earlier time as the NCIB is completed or terminated at the option of Petroamerica.  Any Common Shares that Petroamerica purchases under the NCIB will be purchased on the open market through the facilities of the Exchange at the prevailing market price at the time of the transaction.  All Common Shares acquired under the NCIB will be cancelled.  All purchases will be made through Canaccord Genuity Corp.
    Petroamerica's Board of Directors believes, from time to time, the market price of the Common Shares may not reflect their underlying value. Petroamerica's cash flow capability and balance sheet provide the opportunity to capitalize on the current valuation of Petroamerica in the market which, in the Board's opinion, significantly discounts the value and potential of the Company's asset base.  The Company's cash on hand as well as cash from operations will fund the NCIB program, and continue to support Petroamerica's expansion and growth opportunities.
    25 Mar 2014, 12:21 AM Reply Like
  • amy speers
    , contributor
    Comments (3) | Send Message
     
    Petroamerica Announces Approval of Normal Course Issuer Bid
    5 hours ago - ACQUIREMEDIA
    CALGARY, March 24, 2014 /CNW/ - Petroamerica Oil Corp., (TSX-V: PTA) ("Petroamerica" or the "Company"), a Canadian oil and gas company operating in Colombia, today announced that the TSX Venture Exchange (the "Exchange") has accepted its notice to make a normal course issuer bid ("NCIB") to purchase outstanding Petroamerica common shares ("Common Shares") on the open market, in accordance with the rules of the Exchange.
    As per the Exchange approval, Petroamerica is authorized to purchase up to 55,175,760 Common Shares representing approximately 10% percent of Petroamerica's public float (as defined in the regulations and policies of the Exchange). As of March 21, 2014 there are 595,148,260 Common Shares outstanding of which 551,751,760 represents the public float.
    Petroamerica is authorized to make purchases during the period of March 24, 2014 to March 23, 2015 or until such earlier time as the NCIB is completed or terminated at the option of Petroamerica.  Any Common Shares that Petroamerica purchases under the NCIB will be purchased on the open market through the facilities of the Exchange at the prevailing market price at the time of the transaction.  All Common Shares acquired under the NCIB will be cancelled.  All purchases will be made through Canaccord Genuity Corp.
    Petroamerica's Board of Directors believes, from time to time, the market price of the Common Shares may not reflect their underlying value. Petroamerica's cash flow capability and balance sheet provide the opportunity to capitalize on the current valuation of Petroamerica in the market which, in the Board's opinion, significantly discounts the value and potential of the Company's asset base.  The Company's cash on hand as well as cash from operations will fund the NCIB program, and continue to support Petroamerica's expansion and growth opportunities.
    25 Mar 2014, 12:21 AM Reply Like
  • tullii
    , contributor
    Comments (116) | Send Message
     
    Author’s reply » Parex just bought Verano Energy for $198Million.
    This was around $50,000 per flowing barrel.

     

    Parex also bought Campacho Blocks off Ecopetrol.

     

    Analysts have moved the target price from $12.5 to $19

     

    The PXT.DB is a debenture that pays interest,
    PXT has their annual meeting at 10:30am today. may 13.
    13 May 2014, 10:14 AM Reply Like
  • tullii
    , contributor
    Comments (116) | Send Message
     
    Author’s reply » July 10th Update - tomorrow is Surcoco's shareholder meeting...the board is expected to reject Vetra's offer and allow PetroAmerica's friendly offer...we will soon see how it plays out.

     

    Suroco Energy Inc. Recommends Rejection of Latest Vetra Offer and Reaffirms Unanimous Support for Arrangement With Petroamerica

     

    CALGARY, ALBERTA--(Marketwired - July 10, 2014) - Suroco Energy Inc. (TSX VENTURE:SRN) ("Suroco" or the "Corporation") announces that its Board of Directors (the "Suroco Board"), has, upon the recommendation of the independent special committee (the "Special Committee") of the Suroco Board and advice from its financial advisor and legal counsel, unanimously recommended that holders of Suroco Shares (as defined below) ("Suroco Shareholders") REJECT the latest unsolicited cash offer (the "Vetra Offer") from Vetra Acquisition Ltd., a wholly owned subsidiary of VETRA Holding S.a.r.l. (collectively "Vetra") to acquire the issued and outstanding common shares of Suroco ("Suroco Shares"). See "Reasons to Reject the Vetra Offer" below.

     

    As previously announced, Suroco has entered into an arrangement agreement with Petroamerica Oil Corp. ("Petroamerica"), as amended (the "Arrangement Agreement"), under which Petroamerica will acquire all of the issued and outstanding Suroco Shares pursuant to a plan of arrangement (the "Petroamerica Arrangement"). The Suroco Board unanimously supports the Petroamerica Arrangement.

     

    Each of the Special Committee and the Suroco Board has also unanimously determined that the Vetra Offer is not a "Superior Proposal" (as defined in the Arrangement Agreement) in relation to the Petroamerica Arrangement.

     

    Under the Petroamerica Arrangement, holders of Suroco Shares can elect to receive one of the following for each Suroco Share held:

     

    (i) 2.2161 common shares of Petroamerica ("Petroamerica Shares") (the "Share Consideration");

     

    (ii) a cash payment for a portion of the Suroco Shares tendered and Petroamerica Shares in consideration for the balance of the Suroco Shares tendered such that, for every 100 Suroco Shares, the electing Suroco Shareholder would receive approximately 164.01 Petroamerica Shares in exchange for 74.01 of those Suroco Shares (being 2.2161 Petroamerica Shares per Suroco Share) and would receive approximately CDN$20.79 in cash for the remaining 25.99 Suroco shares (being CDN$0.80 per Suroco Share) (the "Cash and Share Consideration"); or

     

    (iii) CDN$0.80 in cash (the "Cash Consideration").

     

    The total amount of cash available is capped at US$27 million. In the event that the amount of cash elected to be received by the holders of Suroco Shares exceeds US$27 million (including pursuant to the Cash and Share Consideration), the Suroco Shareholders that elected to receive the Cash Consideration will be subject to proration and such Suroco Shareholders will receive consideration consisting of cash and Petroamerica Shares.

     

    Reasons to Reject the Vetra Offer

     

    Pursuant to Vetra's Notice of Variation and Extension dated July 9, 2014 (the "Notice of Variation"), Vetra has made additional variations to the Vetra Offer, including (i) increasing its offer to CDN$0.85 in cash per Suroco Share, and (ii) reducing the conditions to the Vetra Offer. Reference is made to the Notice of Variation for full details of the additional variations made to the Vetra Offer.

     

    Suroco's press release dated July 4, 2014 (the "July 4 Press Release") and its Second Supplement (the "Second Supplement") to the management information circular and proxy statement of Suroco dated May 27, 2014 (the "Information Circular") and the first supplement to the Information Circular dated June 22, 2014 (the "First Supplement") (copies of which are available on SEDAR at http://www.sedar.com and on Suroco's website at http://www.suroco.com), set forth a number of benefits that the Suroco Board believes are provided by the Petroamerica Arrangement, including, among others:
    •The Petroamerica Arrangement will provide long term value in excess of the consideration being offered under the Vetra Offer.

     

    •The Petroamerica Arrangement is supported by the largest Suroco Shareholder, by Suroco's directors and officers and by significant numbers of other major Suroco Shareholders.

     

    •The growth and development of Petroamerica is expected to be accelerated by the combination with Suroco.

     

    •The combined company resulting from the Petroamerica Arrangement is expected have a strong, under-levered balance sheet that will be able to fully fund the future development and exploration of its asset base, including the assets contributed by Suroco.

     

    •Petroamerica has an established history of deal making and delivering reserves and production growth that has resulted in substantial value creation for its shareholders.

     

    •Suroco Shareholders will benefit from increased liquidity.

     

    •The combined company resulting from the Petroamerica Arrangement will be better positioned to close the valuation gap with its Colombian peers.

     

    Notwithstanding this latest variation to the Vetra Offer, the Suroco Board continues to believe that the Petroamerica Arrangement is in the best interests of the Suroco Shareholders.

     

    As set forth in greater detail in the Second Supplement under the heading "Benefits of the Petroamerica Arrangement and Recommendation of the Special Committee and the Suroco Board with respect to the Petroamerica Arrangement - Potential for Long Term Value", Suroco has amassed a meaningful land position with exposure to the potentially prolific N Sand oil play in the Putumayo Basin of Colombia, which has been proved up in neighboring Ecuador and is in its infancy in Colombia. Suroco's technical team has proved the N Sand play extension into Colombia and has applied its learnings to identify numerous N Sand prospects and leads that it is expected the combined company will aggressively develop. Recently, Suroco announced the successful discovery of a new pool with the drilling of the Quinde-7 well wherein it encountered 21 feet of high quality, oil-bearing net pay in the Villeta N sand (see Suroco's June 18, 2014 press release).

     

    Suroco Shareholders should understand that Vetra is likely aware of the potential of the oil and gas blocks in the Putumayo Basin in Colombia where Suroco holds an interest in Colombia, because they participate in three of those five blocks with Suroco.

     

    As Vetra continues with its rhetoric, the Suroco Board feels it is important to make clear the following:
    •The Suroco Board is committed to fulfilling its fiduciary duties, acting in an unbiased and open-minded manner, always with a view to the best interests of Suroco and all Suroco Shareholders. The Suroco Board has reviewed every offer in a comprehensive manner, but also with the goal of providing Suroco Shareholders with timely information so that they can act accordingly. This has been made difficult by the tactics that Vetra has undertaken, which have included "low-ball" offers, last minute offers prior to proposed meetings of Suroco Shareholders, or legal tactics with the goal of preventing Suroco Shareholders the opportunity to vote upon the Petroamerica Arrangement. Though Vetra has often criticized the process and behaviour undertaken by the Suroco Board and has attempted to represent that Suroco is not acting in the best interests of Suroco Shareholders, it cannot deny that Vetra's initial offer of CDN$0.30 per Suroco Share to Suroco in March of 2014 has now increased to CDN$0.85 per Suroco Share.

     

    •A key element of the rationale for entering into the Petroamerica Arrangement, which the Suroco Board has stressed from the beginning, is that it will provide access to additional funding and a stronger balance sheet than Suroco by itself. Suroco has built the prime land base in a new oil prone play and has secured a very prospective new block of land which captures a currently unbooked extension of a recent oil discovery. To fund the exploration program and, with success, the development capital required, consolidation into a larger, well-funded entity like Petroamerica is the rational step forward and is part of the progression in delivering future shareholder value.

     

    •The view of all Suroco Shareholders has always been important to the Suroco Board. The Suroco Board encourages Suroco Shareholders to reach out to it and furthermore welcomes a vote by the Suroco Shareholders on the Petroamerica Arrangement. Vetra is aware that it does not have the support of Suroco Shareholders necessary to prevent the approval of the Petroamerica Arrangement and for that reason has resorted to legal tactics to attempt to delay or prevent Suroco Shareholders from exercising their right to vote on the Petroamerica Arrangement. As previously disclosed in the July 4 Press Release and the Second Supplement, Suroco has received written communications from Suroco Shareholders, that hold or control in excess of 35% of the currently issued and outstanding Suroco Shares, indicating that their preference is for the Petroamerica Arrangement, and specifically Petroamerica Shares, so that they can participate in what they believe to be the potential upside of a combined Petroamerica and Suroco and their oil and gas properties. As was disclosed in the July 4 Press Release and the Second Supplement, this figure includes Alentar (which contrary to claims by Vetra, holds approximately 16.1% of the issued and outstanding Suroco Shares).

     

    •Suroco has not committed to an open-ended break fee under the Petroamerica Arrangement. As previously disclosed, that break fee is CDN$4 million plus certain out-of-pocket costs incurred by Suroco in relation to the Petroamerica Arrangement that Petroamerica has specifically agreed to pay. Those out-of-pocket costs, which includes items such as mailing and postage of shareholder information, are nominal amounts in the overall context of the Petroamerica Arrangement. Furthermore, any potential bidder for Suroco would have access to this information if it complied with the non-solicitation provisions of the Arrangement Agreement and in connection therewith entered into the form of confidentiality agreement and standstill required thereunder.

     

    Meeting

     

    As previously announced, the annual and special meeting of the Suroco Shareholders (the "Meeting") has been adjourned to 10:00 a.m. (Calgary Time) on Monday, July 14, 2014 at the offices of Gowling Lafleur Henderson LLP at TD Canada Trust Tower, Suite 1600, 421 - 7th Avenue SW, Calgary, Alberta. At the Meeting, Suroco Shareholders will be asked, among other things, to consider and vote upon the Petroamerica Arrangement.

     

    Please see Suroco's July 8, 2014 press release for important deadlines this week in relation to the Meeting and for election of consideration under the Petroamerica Arrangement
    10 Jul 2014, 03:29 PM Reply Like
  • tullii
    , contributor
    Comments (116) | Send Message
     
    Author’s reply » Further confirmation of the LLANOS/ GPRK hits 1000 BBL well

     

    SANTIAGO, Chile, July 10, 2014 /PRNewswire/ -- GeoPark Limited ("GeoPark") (NYSE: GPRK), the Latin American oil and gas explorer, operator and consolidator with operations and producing properties in Chile, Colombia, Brazil and Argentina, today announces the discovery of the Tigana Norte 1 oil well on its Llanos 34 Block in Colombia. GeoPark is the Operator of and has a 45% working interest in the Llanos 34 Block.

     

    GeoPark drilled and completed the Tigana Norte 1 well to a total depth of 12,141 feet. A test conducted with an electrical submersible pump in the Guadalupe formation, at approximately 11,557 feet, resulted in a production rate of approximately 1,061 barrels of oil per day ("bopd") of 14.6 degrees API, with a 0.49% water cut, through a choke of 24/64 inches and well head pressure of 235 pounds per square inch. Further production history will be required to determine stabilized flow rates of the well.

     

    Production and reservoir analyses from the Tigana 1, 2 and 3, Tigana Sur 1 and Tigana Norte 1 wells on the Llanos 34 Block now indicate that three previously delineated fields and prospects form part of a single larger combined (structural and stratigraphic) trap and field, productive from the Cretaceous Guadalupe and Tertiary Mirador formations. The field is currently producing over 8,500 bopd gross from the 5 wells drilled and completed to date. The Company is carrying out further development and appraisal drilling this year on the Tigana Field complex, including the Tigana Sur Oeste 1 well that is currently being completed. Preliminary results suggest that the stratigraphic component of the trap could enhance the exploration potential of the Llanos 34 Block area.

     

    Since taking over the Llanos 34 Block with no production and no reserves in Colombia two years ago, GeoPark has grown production on this block to approximately 20,000 bopd gross. In 2014, GeoPark is carrying out a 10 well drilling program on Llanos 34 Block, as part of an overall 18-23 well drilling program in Colombia.

     

    James F. Park, CEO of GeoPark, said, "The extension of the Tigana Field is encouraging and we salute our team in successfully discovering, developing, building the necessary infrastructure and putting into production this field in record time. The Tigana Field production has grown from zero to 8,500 bopd gross in less than 7 months. We also believe the new larger combined Tigana Field interpretation will positively impact the field's reserves and development potential."
    14 Jul 2014, 12:27 PM Reply Like
  • tullii
    , contributor
    Comments (116) | Send Message
     
    Author’s reply » Update2015

     

    Petroamerica Provides 2015 First Half Guidance Focusing on Capital Preservation and a 2014 Production Update
    9 hours ago - ACQUIREMEDIA
    CALGARY, Jan. 12, 2015 /CNW/ - Petroamerica Oil Corp. (TSX-V:PTA) ("Petroamerica" or the "Company") is pleased to present its expected production and capital expenditure guidance for the first half of 2015 and provide a 2014 production update (note: all financial amounts shown are in United States Dollars unless otherwise stated).
    In response to the current volatility in world commodity prices Petroamerica is limiting its production, capital and work program guidance to the first six months of 2015.  The Company will periodically update its guidance in response to changes in oil prices and the results from the scheduled exploration and appraisal activities that will take place in the first two quarters of the year.
    Capital Program for the First Six Months of 2015: Brent Oil Price Assumption $55 per Barrel
    Petroamerica's capital expenditure program for the first six months of 2015 is expected to be $20 million, of which $6 million will be allocated towards exploration activities, $7 million for appraisal activities and $7 million for facilities upgrades and workovers. The six month 2015 capital program is expected to be fully funded from net working capital, including current cash on hand of approximately $60 million, and operating cash flows assuming an average $55 per barrel Brent oil price for the first six months of the year. If current oil prices prevail throughout 2015, it is envisaged that the full year 2015 capital expenditure program could range between $25 and $30 million.
    2015 First Half Drilling Program
    The Company's exploration and appraisal drilling program for the first six months of 2015 includes two exploration wells, both of which are substantially carried; at the Garza-Roja-1 well the Company will pay 5.5% of the well costs to maintain a 50% working interest and at the Calatea-2 well, the Company will pay 20% of the well costs to retain a 50% working interest. The drilling program also includes one appraisal well, which is considered a low risk follow-up to the Langur-1X discovery well where Petroamerica holds a 50% working interest. Given the current oil price environment, development drilling activities on the Company's Putumayo properties have been deferred.
    A summary of planned drilling activities for the first half of 2015 is outlined in the following table:
    Block
    Working
    Interest
    Prospect/Well
    Activity Type
    Timing/Status
    LLA-19
    50%
    Langur-2
    Appraisal
    Q1 2015
    LLA-10
    50%
    Garza Roja-1
    Exploration
    Q1/Q2 2015
    El Porton
    50%
    Calatea-2
    Exploration
    Q1/Q2 2015
    2015 First Half Production Guidance
    With this reduced capital program Petroamerica expects its working interest production (before royalties) to average 5,400 barrels of oil equivalent per day ("boepd") for the first six months of 2015. The Company has placed all development drilling plans on hold for the first six months of the year.  The guidance is based solely on production from its Putumayo and Llanos basin fields, including the recently announced Langur discovery. This projection does not include any production from the two exploration wells that are expected to be drilled in the first two quarters of 2015.
    2014 Production Update and Estimated Capital Spending
    Total Company working interest production (before royalties) for the fourth quarter of 2014 averaged 5,988 boepd (97% liquids). Production for the month of December 2014 averaged 5,379 boepd (98% liquids). Production for the entire year averaged 6,246 boepd (98% liquids). These production volumes include December field estimates, which may be subject to minor reconciliation adjustments.
    2014 December production was below expectations due to a number of temporary operational events including:
    Delayed completion of the Quinde-3 well pending reperforation and potential stimulation now anticipated in January of 2015;
    Sand production in existing Quinde wells that resulted in the rig initially assigned to development drilling activities being diverted to carry out workover operations on these producing wells; 
    Water disposal restrictions at the Las Maracas field that have since been improved with the tie-in of an additional injection well and chemical stimulation of existing injection wells.
    Total capital expenditure for the 2014 fiscal year is currently estimated at approximately $44 million, down from the previous projection of $53 million from September 2014. 
    About Petroamerica:
    12 Jan, 10:02 AM Reply Like
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