New Acquisition for Tecpetrol (PTA's JV partner) & CatalystsTecpetrol is PTA's JV partner for the two new Blocks acquired from Petronova (PNA) in the Llanos Basin.
Tecpetrol continues its expansion strategy in South America and just bought this morning Americas Petrogas' (BOE.V) Argentinean oil and gas assets. See below:
https://www.stockhouse.com/news/press-releases/2015/06/17/americas-petrogas-to-sell-subsidiary-to-tecpetrol
So Tecpetrol obviously becomes another potential acquirer for Petroamerica. Tecpetrol is a Midstream and Upstream company with significant operations in Colombia.
I am also looking forward to reading PTA's news in the short-term. The catalysts in the short-term are more than one, according to Value Digger's latest PTA article. I quote them from that article:
Petroamerica And The Catalysts
When it comes to investing in Petroamerica, the existing shareholders and the potential new investors have to bear in mind a key thing. An acquisition scenario is highly likely at any time, given that the canny and knowledgeable investors can currently count the remaining publicly-traded producers in Colombia on the fingers of one hand.
Specifically, and upon completion of the recent acquisition of Apco Oil and Gas (NASDAQ:APAGF) by privately-held Pluspetrol Resources, the remaining publicly-traded and independent producers in Colombia currently are: Gran Tierra Energy (NYSEMKT:GTE), Canacol Energy (OTCQX:CNNEF), Parex Resources (OTC:PARXF), GeoPark (NYSE:GPRK), Amerisur Resources (OTC:ASUXF) and Baron Oil (BOIL.L).
On the acquisition front, both Gran Tierra and Parex Resources have stated that they plan to grow their production through organic expansion and acquisitions. Actually, and after reclassifying all its 2P and 3P reserves in Peru as Contingent Resources, Gran Tierra decided to quit its risky exploration projects in Peru and Brazil in order to grow its production in Colombia. Moreover, Grant Tierra's new CEO stated a few days ago that Gran Tierra plans to grow in all of the basins in Colombia. He said that he is currently considering potential joint ventures, takeovers and asset purchases and expects to close deals in the Andean nation before year-end to increase output and reserves.
The key thing is that Gran Tierra's CEO is feeling the pressure and has to do so, as Gran Tierra's production has been declining over the last nine months, and more importantly, the company lacks diversification in Colombia. Gran Tierra's production is currently coming from only one Block in the Putumayo Basin (Chaza Block), while the company's remaining Blocks in Colombia are still in the early stages of exploration (2-D seismic survey).
Also, Parex Resources' CEO has already stated that:
To be relevant in the market, you really have to be in the range of 25,000 to 50,000 barrels a day". As linked above, he has also stated that he remains committed to growing in Colombia and boosting the company's output to as much as 50,000 barrels a day, as the government is stable and they are comfortable with the oil resources there. Parex acquired Verano in H2 2014, and recently completed a private placement in order to make "opportunistic acquisitions of additional acreage in Colombia".
However, an acquisition scenario is speculative and I will currently set it aside. Excluding an acquisition scenario, the company has the following catalysts over the next weeks and months:
1)Operatorship for the PUT-7 Block (50% WI): Suroco received the operatorship for this Block in May 2014, and after the deal with Suroco, the operatorship will pass to Petroamerica. On that front, the former CEO, Nelson Navarette, stated in November 2014 that the company expected to receive the license to operate its first Colombian oil block in "a few months."
Given that eight months have passed since November 2014, we are currently well within former CEO's "few months" timeframe. Therefore, the company can make an announcement at any time.
This milestone will be a game changer because it will give Petroamerica the opportunity to drill Santa Maria project (50% WI), which is the extension of the proven and producing Quinde oilfield. The company has identified 4 drilling locations in Santa Maria project, targeting 40 MMbbls in place, as illustrated below:
(click to enlarge)
2) Initiation of development drilling in the Suroriente Block: The timing of recommencement of the Cohembi and Quinde development drilling programs is dependent on the oil price as the company has noted. The company will evaluate it as 2015 unfolds, and it will announce its plans for H2 2015 by the end of June 2015.
Once development drilling in the Suroriente Block resumes, the company has identified 14 additional drilling locations in the Cohembi and Quinde fields, as illustrated below:
(click to enlarge)
It must also be noted that the development drilling in the Suroriente Block excludes the exploration wells that the company was initially planning to drill in Q4 2014 in Cohembi North, which is the extension of the existing, proven and producing Cohembi field.
3)Establishment of a credit facility: The company is currently negotiating a new debt facility to gain additional liquidity and expansion capital, but the CEO is waiting for the right deal and expects to finalise by the end of the second quarter of 2015. As also linked above, the former CEO has stated that the company is looking for a single-digit rate.
Nevertheless, it must be noted that the company does not need a bank line unless it chooses to have one, because it holds a significant amount of cash that help it fund its operations by early 2016, as quoted below:
The Company is currently projecting that as a direct result of cost savings initiatives, improvements in the realized oil price, and changes to the capital spending plans for the current year, it will maintain sufficient cash to meet all of its planned commitments throughout the rest of 2015 and into early 2016".
4) The Langur-2 well: The Langur-2 appraisal well (LLA-19 Block) that will be drilled by the end of Q3 2015.
5)The Tautaco-1 well: The Tautaco-1 exploration well (LLA-10 Block) thatwill be drilled in H2 2015 by Petroamerica's JV partner, Parex Resources.
6) The Quinde-3 well: Good news from the Quinde-3 well whose evaluation plan is currently under discussion with the operator, Vetra.
7)JV for El Porton: A new JV partner for El-Porton, given that Petroamerica is presently evaluating all options that are available to protect its interests in the block. The Calatea-2 exploration well is targeting 6.6 MMbbls, as illustrated below:
(click to enlarge)