Petrominerales Surges and Pacific Slumps Before Trading Halt
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 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 (BCOLO) 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.
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 (PREC) fetches 12 times forecast profit and has a market capitalization of $6.57 billion, the data show.
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