CALGARY, Sept. 25, 2014 /CNW/ - Petroamerica Oil Corp. (TSX-V:PTA) ("Petroamerica" or the "Company"), a Canadian oil and gas company operating in Colombia is pleased to provide an update on production activities in the Putumayo Basin, guidance on the production for 2014 and announce the issuance of a new and updated corporate presentation.
Based on current projections for production to the end of 2014, Petroamerica expects to exit the year with a production rate of more than 7,400 barrels oil equivalent per day ("boepd") of working interest production (before royalties). The total combined 2014 annual average production for the Llanos and post-closing Putumayo properties (after the July 15, 2014 closing date of the Suroco Energy Inc. transaction, annualized) is expected to be 6,600 boepd of working interest production (before royalties). This guidance is below original 2014 expectations, primarily due to the extended production restrictions in the Putumayo properties that have been in effect since July 13, 2014. These restrictions are in the process of being lifted and the projections presented here assume that normal production operations and oil evacuation will be restored in the Putumayo properties by October 1, 2014.
Petroamerica's cash position as at August 31, 2014 was US$64 million and based on capex and cash flow projections for the remainder of the year, the Company expects to exit 2014 with a cash balance of over US$60 million.
Over the next 6 months, the Company expects to execute an extensive exploration drilling campaign of up to seven exploration wells targeting high impact conventional structures and low-side fault closures in the Llanos Basin, and N Sand prospects in the Putumayo Basin. Production guidance, work program and capital spending amounts for 2015 will be issued in early December 2014.
Suroriente Block Production (15.8% Working Interest)
Production from the Suroriente Block that was previously halted on July 13, 2014 (refer to the Company's August 19, 2014 press release) due to regional community blockades, has resumed. Production is not yet at the pre-interruption level, as all operational activities required to reach such production levels are still underway. An agreement to lift the blockade in the area of the Corporation's Suroriente oil fields was ratified by local and national government and community representatives on September 19, 2014.
Furthermore, an expanded environmental license for the Suroriente Block permitting the construction of additional well pads, production facilities and drilling activities for the Suroriente fields received final regulatory approval on September 5, 2014. This license had formerly been appealed, unsuccessfully, by one of the affected communities.
The Quinde field resumed normal production operations on July 23, 2014 and a number of Cohembi wells were reactivated in late August. Average Suroriente production for the months of July and August was 5,725 gross barrels of oil per day ("bopd"), or 906 bopd working interest share. Production for the first 23 days of September has averaged 8,648 gross bopd (1,369 bopd working interest share), despite some recent downtime for the Quinde-4 and Quinde-6 oil wells due to submersible pump failures. A service rig is currently on site replacing the pump for the Quinde-6 well, and will commence the replacement of the pump for Quinde-4 immediately afterward.
VETRA Exploracion y Produccion Colombia S.A.S, as the operator of the Suroriente block, is continuing to work closely with local and national government representatives to avoid additional events of this nature and to restore all of the Suroriente oil fields to full production.
The Company is also pleased to announce that it has issued a revised corporate presentation, which is available for viewing and download at the Company's website – www.petroamericaoilcorp.com.
Petroamerica Oil Corp. is a Canadian oil and gas exploration and production company with interests in twelve blocks, located in Colombia's Llanos and Putumayo Basins. Petroamerica's shares are listed on the TSX Venture Exchange under the symbol "PTA".
This news release includes forward-looking statements related to the expected occurrences in relation to the properties and drilling activities identified, the anticipated timing of well results, the timing of resumption of production in the Putumayo Basin and the results thereof, the expected use of funds in the current fiscal year and possible new exploratory drilling in the current year. A multitude of factors can cause actual events to differ significantly from any anticipated development and although Petroamerica believes that the expectations represented by such forward-looking statements are reasonable; there can be no assurance that such expectations will be realized. These forward looking statements are based upon assumptions that Petroamerica has made concerning the oil and gas industry in Colombia, the reliability of available data regarding the properties, and the continuing market for oil and gas. Risk factors may include the uncertainty of conducting operations under a foreign regime, the availability of labour and equipment, the fluctuating price of oil and gas, guerrilla activity in the affected areas, relations with communities where Petroamerica conducts its oil and gas activities and Petroamerica's dependence upon other participants in the property areas. Neither Petroamerica nor any of its subsidiaries nor any of its officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors, nor do any of the foregoing accept any responsibility for the future accuracy of the opinions expressed in this document or the actual occurrence of the forecasted developments.
Although the Company believes that the expectations represented by the forward-looking statements contained herein are reasonable, undue reliance should not be placed on the forward-looking statements because there can be no assurance that such expectations will be realized. The forward-looking statements contained in this document are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Use of 'boe'
Throughout this press release, the calculation of barrels of oil equivalent ("boe") is at a conversion rate of 6,000 cubic feet ("cf") of natural gas for one barrel of oil and is based on an energy equivalence conversion method. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6,000 cf: 1 barrel is based on an energy equivalence conversion method primarily applicable at the burner tip and does not represent a value equivalence at the wellhead
SOURCE: Petroamerica Oil Corp.
For further information: Nelson Navarrete, President and CEO; Colin Wagner, CFO; Ralph Gillcrist, COO, Executive Vice President; Tel Bogota, Colombia: +57-1-744-0644, Tel Calgary, Canada: +1-403-237-8300, Email: [email protected], Web Page: www.PetroamericaOilCorp.com