PetroLatina, the oil and gas exploration and production company focused on Latin America, announces its unaudited interim results for the six months ended June 30, 2009.
- Revenues remained constant at $4.5 million
- Operating profit increased by 109% to $571,000 (2008: $273,000)
- Maiden interim profit before tax of $99,000 (2008: loss of $408,000)
- Basic earnings per share of $0.004 (2008: loss per share of $0.016)
- First and increased second tranche of a convertible loan note for, in aggregate, $11.165 million secured from a subsidiary of existing substantial shareholder Tribeca Oil & Gas Inc, of which $9.875 million was subscribed during the period under review
- Total current liabilities of $28.7 million (including $9.875 million in respect of the convertible loan note)
- Cash at period end of $4.2 million
- Average production increased 222% to 902 bopd net (2008: 280 bopd net)
- RZA pipeline average throughput increased by 17% to 3,669 bopd (2008: 3,134 bopd)
- The La Paloma block's first exploration well, Colon-1, proved successful. Total gross production over the 44 days to June 30, 2009 was 32,499 barrels at an average rate of approximately 739 barrels per day. Total gross production over the 95 days to August 31, 2009 was 55,931 barrels at an average rate of approximately 589 barrels per day.
- Well results and recent 3D seismic are being used to re-map and determine the size of the discovery
The Tisquirama Field saw three successful development wells drilled:
- The Los Angeles-11 and Los Angeles-14 are both on stream. The gross production of Los Angeles 11 to June 30, 2009 was 13,993 barrels at an average rate of 178 barrels per day and to 31 August 2009 was 23,539 barrels at an average rate of 177 barrels per day. The gross production of Los Angeles 14 to June 30, 2009 was 13,994 barrels at an average rate of 203 barrels per day and to 31 August 2009 was 14,705 barrels at an average production rate of 191 barrels per day.
- The Los Angeles-12 exploration well was producing from the Umir sand at an average rate of 57 bopd but was shut-in in August for a frac job. That frac job has subsequently proved to have been only partially successful. Production briefly increased to an average gross rate of 120 barrels per day before falling back to near the pre frac rate. An economic evaluation is therefore currently underway to determine whether it is more advantageous to produce the Umir sand, which has a relatively low production rate but in which the Company holds a larger interest, or whether a better financial result would be obtained by switching production to the oil bearing Lower Lisama formation which is expected to produce at approximately 200 barrels per day gross but in which the Company has a lower interest.
Post Period End Highlights
- Chuira-1, the first exploration well on the Midas block, successfully logged and tested two pay zones. Production in this well decreased from 280 bopd to 40 bopd between July 22, 2009 and August 25, 2009 due to interpreted plugging of the producing perforations by either barite settling or gilsonite plugging and, for that reason a workover was planned to remove this restriction. The service rig is currently on location and the workover is expected to be completed within two weeks.
- The Colon-2 development well at La Paloma, adjacent to the Colon-1 discovery, has recently been completed and placed on a production test at an average rate of 664 bopd
Ongoing Work Program
- Continued development of the Los Angeles field with two further development wells planned this year
- The work over of the Chuira-1 discovery well is now in progress
- A further exploration well (Llamador-1) is planned on the La Paloma block once the location has been determined
- A second exploration well (Zoe-1) is planned on the Midas block in November
- Putumayo-4 continues to be in a planning and program design stage for seismic acquisition
- The Serafín gas project is now expected to come on stream in the first quarter of 2010
- An updated independent reserves report has been commissioned and is expected to be completed by the year end
Luc Gerard, Executive Chairman of PetroLatina, commented, "2009 will be the busiest year for development and exploration activity in PetroLatina's history. With the drilling of at least eight wells planned for 2009 and a 100% success rate achieved for the six wells drilled to date, we are on track to deliver significantly increased production and reserves.
"Despite the lower oil price we are delighted to report a maiden pre-tax profit and expect profitability to continue to improve reflecting both increasing production and reduced corporate and operating costs.
"Our strategy now is to use the cash flow generated from production to progress those projects with the potential to provide the quickest returns."