Petrominerales Ltd. (PMG) rose after a record weekly drop pushed the oil producer’s share price to as low as 55 percent below the net value of assets it owns.
Shares gained 2.4 percent to 12,060 pesos at 12:53 p.m. in Bogota, extending its two-day advance to 7.1 percent. The stock declined 25 percent last week, its worst drop on record, after saying output tumbled 29 percent in the fourth quarter and has fallen an additional 11 percent so far in 2013.
“The sell-off from last week was probably too severe,” said Darren Engels, an analyst at FirstEnergy Capital in Calgary. “You have hard assets that are probably undervalued and you also have significant exploration potential that is not currently reflected in the stock price.”
Petrominerales reported a net asset value of $13.84 per diluted share at the end of 2012, including stakes in two Colombian pipelines and oil reserves. The Canadian-traded shares fell to C$6.40 ($6.24) last week, a 55 percent discount to the company’s reported net asset value.
“There’s a fair bit of value that’s potentially not being realized right now by the market,” Engels said. “An attractive valuation is an attractive story.”
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