Petroamerica Oil Corp. has provided its expected production and capital expenditure guidance for the first half of 2015 and a 2014 production update.
In response to the current volatility in world commodity prices Petroamerica is limiting its production, capital and work programme guidance to the first six months of 2015. The company will periodically update its guidance in response to changes in oil prices and the results from the scheduled exploration and appraisal activities that will take place in the first two quarters of the year.
Capital programme for the first six months of 2015: Brent oil price assumption US$55 per bbl
Petroamerica’s capital expenditure program for the first six months of 2015 is expected to be US$20 million, of which US$6 million will be allocated towards exploration activities, US$7 million for appraisal activities and US$7 million for facilities upgrades and workovers. The six month 2015 capital programme is expected to be fully funded from net working capital, including current cash on hand of approximately US$60 million, and operating cash flows assuming an average US$55 per bbl Brent oil price for the first six months of the year. If current oil prices prevail throughout 2015, it is envisaged that the full year 2015 capital expenditure program could range between US$25 and US$30 million.
2015 first half drilling programme
The Company’s exploration and appraisal drilling program for the first six months of 2015 includes two exploration wells, both of which are substantially carried; at the Garza-Roja-1 well the company will pay 5.5% of the well costs to maintain a 50% working interest and at the Calatea-2 well, the company will pay 20% of the well costs to retain a 50% working interest. The drilling program also includes one appraisal well, which is considered a low risk follow-up to the Langur-1X discovery well where Petroamerica holds a 50% working interest. Given the current oil price environment, development drilling activities on the company’s Putumayo properties have been deferred.
2015 first half production guidance
With this reduced capital programme Petroamerica expects its working interest production (before royalties) to average 5400 bbls of oil equivalent per day for the first six months of 2015. The company has placed all development drilling plans on hold for the first six months of the year. The guidance is based solely on production from its Putumayo and Llanos basin fields, including the recently announced Langur discovery. This projection does not include any production from the two exploration wells that are expected to be drilled in the first two quarters of 2015.
2014 production update and estimated capital spending
Total Company working interest production (before royalties) for the fourth quarter of 2014 averaged 5988 boepd (97% liquids). Production for the month of December 2014 averaged 5379 boepd (98% liquids). Production for the entire year averaged 6246 boepd (98% liquids). These production volumes include December field estimates, which may be subject to minor reconciliation adjustments.
2014 December production was below expectations due to a number of temporary operational events including:
- Delayed completion of the Quinde-3 well pending reperforation and potential stimulation now anticipated in January of 2015;
- Sand production in existing Quinde wells that resulted in the rig initially assigned to development drilling activities being diverted to carry out workover operations on these producing wells;
- Water disposal restrictions at the Las Maracas field that have since been improved with the tie-in of an additional injection well and chemical stimulation of existing injection wells.
Total capital expenditure for the 2014 fiscal year is currently estimated at approximately US$44 million, down from the previous projection of US$53 million from September 2014.
Adapted from a press release by David Bizley