Pacific Rubiales Energy Corp. (PRE), the Latin American non-state oil producer with the biggest market capitalization, dropped after losing a dispute with Ecopetrol SA (ECOPETL) that will cut its share of output at a shared field.
Shares dropped 4.8 percent to 40,740 pesos at 12:44 p.m. in Bogota, its fifth daily drop. Rubiales was the second-worst performer on the Colcap (COLCAP) index, which was down 0.2 percent.
The company took a $61 million charge on net income after an arbitrator ruled yesterday in favor of Ecopetrol, which would mean a lower share of production for Rubiales at the Quifa SW field. Under the contract, Rubiales’s 60 percent stake in the field decreases according to a high-price clause that assigns additional production to Ecopetrol.
Rubiales reported a net loss of $24 million in the fourth quarter after the provisions for the arbitration, compared with a gain of $81 million in the prior year.
The company would have had a profit in the quarter excluding this number, Chief Financial Officer Carlos Perez said today on a conference call. Rubiales is taking a “very conservative approach” with its provisions, Perez said.
To contact the reporter on this story: Christine Jenkins in Bogota at email@example.com