Petrominerales Surges and Pacific Slumps Before Trading HaltAndrew Willis and Christine Jenkins
Petrominerales Ltd. posted a record gain and Pacific Rubiales Energy Corp. dropped in Bogota as the two Colombian crude producers were put on trading halt in Toronto pending news.
Petrominerales, based in Calgary, surged 18 percent to 15,780 pesos at 12:21 p.m. in Bogota before the stock was suspended. Pacific Rubiales, the world’s fastest-growing major crude producer, fell 2.7 percent to 38,760 pesos.
Petrominerales Chief Executive Officer Corey Ruttan and his counterpart at Pacific Ronald Pantin both declined to comment on the halt in trading when contacted by Bloomberg.
“Obviously putting two and two together, you get the story that Pacific is bidding for Petrominerales,” Rupert Stebbings, equity markets vice president at Bancolombia SA in Medellin, Colombia, said in a phone interview. “It’s going to depend on what they pay for it, and that will be the deciding factor if there is a transaction.”
In an Aug. 13 interview, Pantin didn’t rule out a bid for Petrominerales as Pacific looks to buy a low-density crude producer in Colombia in a bid to reduce the cost of transporting its mostly heavy oil.
“It’s a great company, they have a lot of light oil,” Pantin said at the time. “I am not negotiating with them. I am keeping an eye on all of them.”
Pacific’s compound production growth over the last five years is 47 percent, the fastest among 109 producers with a market value of at least $5 billion tracked by Bloomberg. The group average is 8.4 percent growth, the data show. The company, based in Bogota, buys gasoline on the international market and blends it with heavier oil before sending the mix to port at a “huge cost,” Pantin said.
Petrominerales, which produces mostly from fields in Colombia’s Llanos basin, reported a 31 percent decline in second-quarter production. July output rose and the company has opportunities to continue growing, Ruttan said in an Aug. 9 interview, declining to comment on the company’s prospects as an acquisition target.
“It remains to be seen today why they were halted,” David Epstein, a managing director with CRT Capital Group LLC in Stamford, Connecticut said by phone. “We’re all waiting for them to announce something. It’s certainly interesting that it’s both these companies.”
Petrominerales has been able to recover output early this quarter, Epstein said. “Their production has almost been cut in half, before stabilizing in the second quarter, and then up further.” he said.
Pacific had 514 million barrels of proved and probable reserves by end 2012, while Petrominerales had 41.2 million barrels, the companies said in separate September presentations.
Today’s move wiped out a year-to-date loss for Petrominerales. The shares trade at 14 times estimated 2013 earnings and have a market value of $703 million, according to data compiled by Bloomberg.
Pacific Rubiales fetches 12 times forecast profit and has a market capitalization of $6.57 billion, the data show.