Pacific Rubiales Energy Corp., the operator of Colombia’s largest oil field, rose the most in 15 months as the company announced cost-cutting plans and said first-quarter output was close to the high end of its target.
Shares rallied 8.2 percent to 37,540 pesos at the close of trading in Bogota, the steepest one-day gain since January 2012. It was the second-best performance on the Colcap index, which fell 0.4 percent. Today’s advance pared the stock’s drop over the past month to 16 percent.
Rubiales will try to cut operating costs by about $8 per barrel for the rest of the year by trimming spending on production, transportation and diluents, Chief Executive Officer Ronald Pantin said today in a statement. The company said last month that operating costs for 2012 jumped 17 percent from the prior year to $39.77 per barrel.
“The underperformance in the last month or so has really been driven by their reported increase in operating costs, and the market has been reacting in a very negative way,” Justin Anderson, a Calgary-based analyst at Salman Partners, said in a telephone interview. “This release seems like an attempt to calm the market.”
Rubiales President Jose Francisco Arata told reporters today in Cartagena that “the market was finally getting the message, in terms of the cost reductions we’ll be able to get.”
The company’s net production after royalties in the first quarter was 126,000 to 128,000 barrels of oil equivalent per day, a 30 percent increase from last year’s average, according to a statement today. Rubiales said in a presentation at the beginning of the year that it was forecasting 115,000 to 130,000 barrels a day for 2013, which Pantin said at the time was “conservative guidance.”