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  • Basrah Gas Company And Shell, Mitsubishi Start JV

    [From RDS Website] Some 20 million cubic meters per day is currently being flared in the South of Iraq.

    This represents 170,000 barrels of oil equivalent each day (boe/d) of raw gas.

    The South Gas Company will have 51% majority shareholder in the Basrah Gas Company (BGC), a joint venture with additional Shell holding interests of 44% and Mitsubishi Corporation 5%. Over time, the joint venture will gather, treat and process raw gas produced within Basrah and sell the processed natural gas and associated products such as condensate and liquefied petroleum gas (LPG) for use in the domestic and export markets.

    Basra Gas

    BGC has a phased-approach to the project: rehabilitation, rejuvenation and expansion. In the initial rehabilitation phase, it aims to return the existing non-operational facilities back to work in a safe manner. The rejuvenation work will return the assets to reliable and efficient operation and addresses further operational improvements. Lastly, the expansion phase intends to develop additional gas gathering (compression), gas processing and power generation facilities.

    There are big opportunities to export the processed gas, for example, as liquefied natural gas (LNG), creating a new income stream for Iraq's economy and increasing the potential for reliable domestic energy infrastructure, which in turn would spur local economic development.

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    Mitsubishi Corporation Joint Venture Starts Natural Gas Operations in Iraq
    Project seeks to contribute to economic development in Iraq

    Mitsubishi Corporation (MC) is pleased to announce that Basra Gas Company (BGC), a joint venture established by MC, Royal Dutch Shell plc (Shell) and Iraq's state-run South Gas Company (SGC) for the development of an associated gas utilization project in southern Iraq, has started commercial operations. BGC will implement the project, which entails gas collection and processing.

    BGC will collect raw gas from the Rumaila, Zubair and West Qurna Phase 1 oil fields in southern Iraq. The gas will be processed to produce natural gas, condensate and liquefied petroleum gas (LPG). Based on initial upgrading undertaken in keeping with the feasibility study, SGC and with the support of Shell and MC managed to increase the processing capacity of the current assets by 150 million cubic feet per day to more than 400 million cubic feet per day. Investments are currently being made with the aim of increasing capacity at the facility to some 2 billion cubic feet per day.

    BGC will commercialize the large amounts of gas flared every day in southern Iraq for supply to the domestic market and, in so doing, play an important role in providing a stable supply of energy to Iraq. The development of this commercial activity will also help to stimulate economic development in Iraq. Once domestic demand in Iraq is met, and pending the relevant permits from the Iraqi government, the project will seek to concretize plans for the export of condensate and liquid petroleum gas (LPG) and subsequently the export of liquefied natural gas (LNG).

    According to the International Energy Agency (IEA), Iraq is projected to significantly increase oil production by 2035, which will account for 45% of the world's projected incremental oil production. In order to meet this projection, the processing of oil associated gas must remain stable. The project will therefore draw much attention for what is expected of its role in ensuring the stability of oil associated gas production in southern Iraq.

    Technical and commercial expertise provided by MC will complement BGC's capacity and raise its corporate value. In the long-term, MC will also aim to contribute a stable supply of energy for the Japanese market. Last October, MC set up the Southern Iraq Office in Basra so that the company can gain a better understanding of local needs, not only as it relates to this project, but also with a view to developing other projects in the field of energy and projects in infrastructure development such as power generation, as well as businesses in the commodities sector. Through its business activities, MC hopes to make a valuable contribution to economic development in Iraq.

    Reference Information

    Location of Basra (Iraq)

    Company Outlines

    1.Royal Dutch Shell plc

    ・Headquarters:Carel van Bylandtlan 30, 2596 HR The Hague, The Netherlands

    ・Business Activities:Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges. Shell companies have operations in more than 70 countries and territories with businesses including oil and gas exploration and production; production and marketing of liquefied natural gas and gas to liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects. For further information, visit

    ・Representative :Peter Voser, CEO

    ・Year Established:1907

    ・No. of Employees:Approximately 87,000 in 2012

    2.South Gas Company

    ・Headquarters:Khor Al Zubair, Basra, Iraq

    ・Business Activities:Processing and commercialization of associated gas

    ・Representative:Ali Hussein Khudhier, Director General

    ・Year Established:1998

    ・No. of Employees:Approximately 5,400 in 2012

    3.Basra Gas Company

    ・Headquarters:Khor Al Zubair, Basra, Iraq

    ・Business Activities:Processing and commercialization of associated gas

    ・Representative:Gasser Hanter, Managing Director

    ・Date Established:October 25, 2012

    ・No. of Employees:Approximately 5,000 as of May 1, 2013

    4.Mitsubishi Corporation

    ・Headquarters:3-1-2 Marunouchi, Chiyoda-ku, Tokyo, 100-8086 Japan

    ・Business Activities:Mitsubishi Corporation has six Business Groups which develop operations in the diverse fields of Industrial Finance, Logistics & Development, Energy, Metals, Machinery, Chemicals and Living Essentials. In addition to these Business Groups, Mitsubishi Corporation has also recently established the Business Service Group and Global Environment & Infrastructure Business Development Group.

    ・Representative:Ken Kobayashi, President and CEO

    ・Founded:April 1, 1950

    ・No. of Employees:65,289 (consolidated, as of September 30, 2012)

    Inquiry Recipient Mitsubishi Corporation
    Telephone:+81-3-3210-2171 / Facsimile:+81-3-5252-7705

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    Apr 06 8:07 PM | Link | Comment!
  • Forget Double-Bubble, The Triple Bubble Is Here

    USA moves from Dubble Bubble to Triple Bubbles

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    Bubble Thesis presented by Paul Craig Roberts.

    1) Stock Market: The Fed can support high stock prices by having banks buy up stock futures with currency that is printed into existence at near 0% interest rates. Fed is pouring liquidity into the banks and banks are using liquidity to speculate on stocks. This is creating a bubble since the supply of new dollar printed are printed at a rate that far outweighs the demand for these dollars.

    2) Bond Market: 1 Trillion of new debt is bought by Fed each year. The Bond prices are so high,real interest rates are negative, if the USD dollar gets in trouble, if the fed raised interest rates with all the debt in the system, it would collapse the stock and bond markets.No choice here but to keep printing.

    3) USD Market: The USD exchange rate is unstable, because the supply of new $$ is rising to fast to the demand for them on exchanges. Example, China did a deal with 2 Australia banks to not convert to USD and bypass it as a medium of exchange. YUAN and AUD now can trade direct, indicating an aversion to holding USD.

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    (USD loosing purchasing power since removed from Gold Standard )

    His book is here Link:

    About Dr. Paul Craig Roberts

    Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

    Where to flee if a bubble bursts...

    Resources in the ground. Precious metals in your hands(not paper).

    Real estate is the last bubble to pop, so land and housing is still viable but do your homework. Oil will fair well, as will niche food plays and anything that is a hedge against inflation, even BTC isn't out of the question.

    Tags: UDN
    Apr 06 8:06 PM | Link | Comment!
  • Columbia Basins Poised For Exploration And Perhaps Takeovers

    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.



    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.


    TID :

    (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---


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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.


    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".


    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.

    Mar 15 6:54 PM | Link | 3 Comments
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