Petroamerica to Triple Output in Colombia on Suroco DealAndrew Willis
Petroamerica Oil Corp., a Calgary-based oil producer focused on Colombia, plans to more than triple output in two to three years after buying Suroco Energy Inc., and is on the lookout for more acquisitions.
Petroamerica expects production to rise to 20,000 barrels a day, from about 6,500 barrels now, as the takeover gives the company access to the southern Putumayo Basin in Colombia, Chief Executive Officer Nelson Navarrete said in an interview from his Bogota office today. While seeking more acquisitions to increase production, the company is also open to takeover offers from potential suitors, he said.
“Our plan is to continue diversifying assets, to operate fields and continue growing,” said Navarrete, a former vice president of exploration and production at Colombia’s Ecopetrol SA. “If someone is able to make an attractive offer that shareholders feel represents the correct value, one would have to do it.”
Petroamerica plans to drill two exploratory wells in Putumayo this year and to increase production from the area to 3,000 barrels a day by year-end, from 2,500 barrels now, Navarrete said. The company also expects to get results from three long-term production tests in Colombia’s Llanos plain and to drill a further three exploratory wells there this year, he said.
The acquisition of Suroco is scheduled to be concluded this month.
Suroco’s technical team gained substantial experience working in Ecuador and will remain part of the combined company, Navarrete said. The acquisition will give Petroamerica four blocks in Putumayo and boost the company’s probable reserves to about 8 million barrels, from 5 million, according to a May 26 presentation.
Petroamerica has a “solid” cash flow and plans to raise about C$70 million ($64 million) by next year, including C$35 million to refund three-year notes that mature next year, Navarrete said.