Pacific Rubiales Energy Corp., Latin America’s most valuable non-state oil producer, is confident of retaining the right to operate Colombia’s biggest field, Chief Executive Officer Ronald Pantin said.
Relations with state-owned partner Ecopetrol SA are “excellent” and keeping Pacific as operator beyond 2016, when current contracts expire, would be “a win-win,” Pantin said in a Feb. 1 interview from Bogota.
“I can’t come out and say we have anything signed but both parties recognize we have a common goal,” he said. “We have shown our capacity as operator and have certain advantages, such as owning the area’s water and power installations.”
Pantin, a former executive of Petroleos de Venezuela SA who co-founded the company in 2008, is expanding output at the Rubiales field in the Eastern Llanos basin as the company targets as much as 130,000 barrels per day this year, compared with 34,100 in 2009. He’s made eight acquisitions in the past year as part of an effort to double output through 2016, when the concession to its largest field expires. Colombia is the fastest-growing major oil producer in Latin America after opening up areas once controlled by rebel groups.
The Rubiales field comprises the Rubiales and Piriri blocks. Ecopetrol has 50 percent of Piriri and 60 percent of the Rubiales block, according to the company’s website.
“Everyone already has the field transfer in their estimates,” Valeria Marconi, an analyst at Correval SA brokerage in Bogota, said by phone today. “The field has been losing its relative importance for the company, which has made a big effort to open new fields to diversify production.”
In Brazil, Pacific Rubiales plans to take over operations of an offshore block in the Santos basin, which reported a discovery last month. The company will assume the right to operate from partner Karoon Gas Australia Ltd. after three wells are drilled and regulator ANP gives its approval, Pantin said. Pacific owns 35 percent of the project, agreeing in September to pay $40 million and fund as much as $210 million in exploration costs.
Ian Howarth, an external public relations representative of Karoon, and company Secretary Scott Hosking didn’t immediately respond to e-mails and phone messages seeking comment.
The company is also considering participating in Brazil’s next bidding round of oil licenses and would do so without partners, Pantin said.
“Many people perceive Pacific as a heavy oil producer, but we come from Venezuela and our experience is in Lake Maracaibo, the biggest offshore operation in the world,” he said.
The company, which trades in Bogota and Toronto, has a market value of $7.7 billion, making it Latin America’s most valuable producer after state-run Ecopetrol SA, Petroleo Brasileiro SA and YPF SA, according to data compiled by Bloomberg. Pan American Energy LLC, Argentina’s biggest oil exporter, and state-owned Petroleos Mexicanos and PDVSA aren’t publicly traded.
Pacific Rubiales rose as much as 2.8 percent to a three-month intraday high of 43,540 pesos in Bogota today. The shares have climbed 12 percent in the past six months in U.S. dollar terms compared with an average 22 percent gain by global peers tracked by Bloomberg.
Pantin said he would be willing to sell the company if he received an offer with a big enough premium over the current share price, which he described as cheap.
The stock fetches 3.34 times estimated earnings before interest, taxes, depreciation and amortization, the second-lowest ratio among 15 global peers tracked by Bloomberg. While the company was courted by a prospective buyer more than two years ago, there is no interest being shown now, he said.
Pacific would be willing, and is financially able, to continue last year’s buying spree if opportunities arise, Pantin said. The company budgeted capital expenditures of $1.7 billion this year and forecasts Ebitda of as much as $2.8 billion.
“That means I have $1.1 billion that can be used for accelerating organic growth or taking options if they’re good,” he said. “Any acquisition would have to be accretive, very accretive.”