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BOGOTA, Aug. 14 (UPI) -- Colombia's oil pipelines are experiencing an increase in attacks by rebel guerrillas, although one of the country's energy chiefs said the problem is temporary.
Oil production facilities owned by Ecopetrol along with some 27,000 homes were without power after an attack with explosives in Putumayo province, Bloomberg reported Thursday.
Armando Zamora, director of the National Hydrocarbons Agency, said the Transandino pipeline has been attacked a "few times" during the last month, most likely carried out by the Revolutionary Armed Forces of Colombia, or FARC.
"They want to create pressure and show they are still alive," he told Bloomberg. "What else can they do but attack something essential?"
Although oil production has continued, oil transport has been sabotaged by the surge in attacks. In the case of the attacks on Transandino, companies stored crude or trucks were used for transport in place of the 190-mile pipeline.
Zamora noted that Colombia's steps to push back guerrilla troops and increase security have reduced sabotage on its pipelines since President Alvaro Uribe assumed office in 2002. Last year there were about 11 pipeline attacks. In the early 2000s, when attacks were rampant, a single pipeline experienced 171 attacks during a one-year period.
Attacks on oil companies and kidnappings of engineers have also declined in the last decade, Zamora said. "Now you can go to areas where you couldn't go before because of safety," he said.
Zamora pointed out that military forces are closing in on rebel leaders, so the recent wave of attacks is "temporary."
In addition, a plan allowing the U.S. military to use bases in Colombia may also help to increase overall pipeline security.
According to Zamora, improvements in Colombia's security situation are showing results in helping to attract foreign investors as the country auctions rights for oil exploration. He expects foreign investment in natural gas and oil will increase to a record $4 billion in 2010. This year, he said, such investments will decrease slightly from 2008's total of $3.6 billion.
Dana Coffield, chief executive officer of Calgary-based Gran Tierra Energy, told Bloomberg that Colombia's security is a less pressing concern than it was previously. Since "two or three years ago, the industry has really woken up to improvements," he said. "There has truly been a land rush."
Gran Tierra Energy holds interests in 16 blocks in Colombia. It is currently producing in the Santana, Guayuyaco, Chaza, Guarchiria and Magangue blocks. The Rio Magdalena, Talora, Mecaya, Azar, two TEA blocks, San Pablo, Guachiria Norte, Guachiria Sur, Garibay and Catguas are in the exploration phase.
Bloomberg coverage of pipeline disruption
(link is http://www.bloomberg.com/apps/news?pid=20601086&sid=aSOv6nehDats)
Colombian Rebels Step Up Oil Pipeline Attacks, Agency Head Says
By Heather Walsh
Aug. 13 (Bloomberg) -- Colombian guerrillas are stepping up attacks on oil pipelines, which are among the easiest targets for rebels on the run from government military offensives, the head of the nation’s hydrocarbons agency said.
The Transandino pipeline, which carries oil across southern Colombia to the port of Tumaco on the Pacific coast, has been attacked a “few times” in the past month, probably by the Revolutionary Armed Forces of Colombia, or FARC, said Armando Zamora, director of the National Hydrocarbons Agency.
“They want to create pressure and show they are still alive,” he said in an interview yesterday. “What else can they do but attack something essential?”
Colombia’s efforts to push back rebel troops and bolster infrastructure security has reduced sabotage on pipelines since President Alvaro Uribe took office in 2002. Attacks dropped to about 11 last year, compared with the start of the decade, when one pipeline was attacked a record 171 times in a year, Zamora said.
Recent assaults have halted oil transport though not production, Zamora said. Companies stored oil or used trucks for transport when the 306-kilometer (190-mile) Transandino pipeline carrying oil from fields in Putumayo was attacked.
The pipeline is owned by state-owned Ecopetrol SA. Gran Tierra Energy Inc. and Emerald Energy Plc also operate in Putumayo, according to their Web sites.
Investment in natural gas and oil from companies abroad will surpass $4 billion next year, a record, Zamora said. This year, spending will slide “a little” from $3.6 billion in 2008, he said. Colombia’s oil output will rise to between 650,000 and 700,000 barrels at year-end and return to its all- time peak of 850,000 barrels before 2014, Zamora said.
To contact the reporter on this story: Heather Walsh in Bogota at hlwalsh@bloomberg.net
Posted for Blackjack:
U.S. troops to help Colombia with security
By Ana Isabel Martinez
CARACAS (Reuters) - South America's hardline leftist leaders on Wednesday criticized U.S. plans to deploy extra troops at bases in Colombia, accusing Washington of using the war on drugs as a pretext to boost its regional military presence.
Colombian President Alvaro Uribe is meeting South American presidents this week to try to drum up support for the U.S. plan to base anti-drug flights in the world's top cocaine producer after the U.S. military lost access to a base in neighboring Ecuador.
Venezuelan President Hugo Chavez -- a persistent critic of Washington -- said the Colombian plan could be a step toward war in South America and called on President Barack Obama not to increase the U.S. military presence in Colombia.
"These bases could be the start of a war in South America," the socialist Chavez told reporters. "We're talking about the Yankees, the most aggressive nation in human history."
Chavez has put his troops on alert in previous diplomatic disputes with Colombia but then backed down.
A close Chavez ally, Bolivian President Evo Morales, a former coca farmer who ousted U.S. anti-drug agents last year, said Colombia's drug-funded FARC rebels had become Washington's "best tool" to justify military operations in the region.
"We can't have all these planes and military equipment concentrated in Colombia. This is against the FARC. This isn't against drug-trafficking, it's against the region. Our duty is to reject it," said Morales, who met Uribe on Tuesday.
Uribe's security drive would give U.S. forces access to seven Colombian bases and increase the number of American troops in the Andean nation above the current total of less than 300 but not more than 800, the maximum permitted under an existing pact.
OBAMA STRATEGY SPOILED?
The uproar over Uribe's strategy could spoil Obama's efforts to improve ties with Latin America while carrying on the war on drugs, which critics say has failed.
Obama won praise for condemning a military coup in June that ousted Honduras' left-wing president, but some have faulted him for not taking a more active role in talks to reinstate the deposed leader, Manuel Zelaya.
Even Brazilian President Luiz Inacio Lula da Silva, the prominent moderate in the region, has expressed concern over the U.S.-Colombia talks on an expanded American troop presence.
Uribe met on Wednesday with another moderate, Chile's center-left President Michelle Bachelet, whose government was more restrained.
"The decisions that every country takes are sovereign and must be respected," Chilean Foreign Minister Mariano Fernandez told reporters.
In Peru, the world's No. 2 cocaine producer, Uribe received support from President Alan Garcia, a pro-Washington conservative who is one of his few allies in the mainly left-leaning region. Continued...
This is great news considering FARC rebels funded by Hugo have blown up their State oil pipeline twice in 6 months.
Nice little find:
Start at 2:05
http://watch.bnn.ca/market-call/july-2009/market-call-july-16-2009/#clip194270
Well, day one is here. Highest close since Oct. 2008. If it holds for 3 days $4.00 will come quickly IMHO.
News
Gran Tierra Energy temporarily reduces production operations in Putumayo Basin of Colombia in response to pipeline disruption
On Monday June 15, 2009, 8:30 am EDT
CALGARY, June 15 /PRNewswire-FirstCall/ - Gran Tierra Energy Inc. (NYSE Amex: GTE, TSX: GTE), a company focused on oil exploration and production in South America, today announced that it has temporarily reduced production operations in the Putumayo basin in southern Colombia in response to a recent disruption to the Ecopetrol-operated Trans Andean Pipeline west of Orito.
"Since the onset of the disruption, Gran Tierra has been able to maintain a production rate of 2,000 barrels of oil per day (BOPD) net after royalty, and we expect to continue production at rates equal to or greater than this level while Ecopetrol works to reestablish pipeline transportation of crude from the Putumayo Basin," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy. "We expect oil transportation through the Trans Andean Pipeline west of Orito to resume shortly."
Production from Argentina continues to average approximately 900 BOPD net after royalty.
The suspension of production operations has had no impact on drilling operations. Testing of Costayaco-7 has been initiated and the drilling of Costayaco-8 is continuing. Both testing and drilling operations are expected to be completed by the end of June.
Its always interesting to see a change in plans with a strong upward move. Seems to be a positive sign.
The rumor is "oil is there". There is a problem with the drill site that made the company come out with a PR stating water contact. A detailed report is coming. The stock sold off as a dry hole. A positive report on C-7 would be considered a surprise.
Below is from GTE's May 7, 2009 PR that indicates both questions will be answered the first
two weeks of June. The chart shows an uptend, so the next PR could spike the SP up nicely. IMHO
The bulk of Gran Tierra Energy's 2009 capital spending is scheduled to be dedicated to further developing the Costayaco field. The company reported the recent drilling completion of Costayaco-7 at the northern limit of the Costayaco Field. Testing is to be initiated in mid-May and is expected to take approximately 2 weeks. Costayaco-8, a development well located 600 meters south of Costayaco-1, is expected to begin drilling on May 8th, with drilling expected to take approximately one month. Costayaco-9 and possibly Costayaco-10 (the latter subject to rig timing) are scheduled to follow this year.
A couple of positive links below. One showing new Institutional buying in last 3 months. The other is a new forward outlook.
http://www.reuters.com/finance/stocks/institutionalHolders?symbol=GTE.A
wunderlich report summary
Summary
We believe investors continue to shy away from Gran Tierra (GTE) as they
believe its primary asset may be fully defined. However, we believe the cash
flows from Costayaco are not being properly valued. In fact our discounted
cash flows from Costayaco show the play is worth more than the current stock
price, while the exploration plays are being given little/no value, providing
investors a nice opportunity, in our opinion. Gran Tierra had a solid 1Q09 that
beat estimates and updated the development plan for Costayaco Field. The
company expects the field to peak at 17,500 net bbls/d once the 10th well is
drilled and online in 2010, and remain at peak production for about four years.
Key Points
n Our discounted cash flow model values Costayaco over the current stock
price. Using $60/bbl WTI, we calculate Gran Tierra should be valued at
$2.84-$3.65/share once the working capital is included based on the
Costayaco Field alone (using metrics provided by the company and
discounting the cash flows). As a whole, we maintain our Buy rating and
$5.00 price target based on our forecasted $1.12/share cash flow and 4.5x
multiple.
n Costayaco should throw off a great deal of cash with little reinvestment.
We estimate that once the 10th Costayaco well is drilled, Gran Tierra should
have only maintenance/workover costs to keep its production at optimal
levels. Gran Tierra does not expect to drill additional wells on the play unless
the reservoir performs better than expected, which obviously would provide
upside to investors. We view the field as a cash cow going forward.
n Is everything else at Gran Tierra free? Based on our DCF analysis, we
believe the Costayaco Field is worth more than the current share price. In our
opinion the Colombia exploration program, the Peruvian plays and Argentina
production are free. Cash flows from Costayaco, and cash on hand, should be
used to actively explore 5.6 million net acres by drilling four exploration wells
in Colombia this year and beginning to drill in Peru in 2010.
n Peru could be huge. We are excited about the Peruvian acreage and believe
drilling could begin as soon as 1H10. Gran Tierra remains focused on the play
as data comes in, and with seismic expected to come in later this year, we
could hear incremental data about prospects to drill. We remain bullish on the
Peru (and Colombia) assets and believe management's performance at
Costayaco could be a barometer for what is to come on these plays.
n Gran Tierra has over $0.50/fully diluted share of cash on its balance
sheet. Since the stock trades at under $3.00, nearly 20% of the current stock
price is cash. We believe investors have overlooked Gran Tierra’s strong
balance sheet due to the company's size. The company should have no
problems funding its drilling programs for 2009 and beyond, while also
building up additional cash due to the low reinvestment at Costayaco
Nice chart. You going to wait for a close over $2.97 to give an e-mail alert?
It seems the bad news today ran the traders out. Didn't realize news was this close. The chart must of been bought up for possible good news. Looks like we stay here a while.
Chart showing a break over 3.00 next week. Enjoy.
Sounds good. I would add the chart is showing a pivot point of 2.43. If the over all market goes below 7300(DOW), oil @ 35.00 or we ever close on GTE below 2.43 then 2.00 is a given. Last quarter will come out Feb 25th for those tracking them.It is time to wait and hold what you have. GTE is showing strengh here.
Yes, looking back a few years, there were those that told everyone about the dangers of the stock. They were crucified for giving there reasons. I think just about everyone made some money on AURC in its hay day. You even had MM's on the board giving the tops and bottoms. It was a great time in the overall markets. I think AURC is just misunderstood.
I think you make a good case to short the stock. That would give you about .80 cent on the short side. Problem is your logic, and the charts disagree. The charts show an uptrend for the last couple months. The street knows about the earning so it won't be a suprise.
BNN TOP PICK is GTE. Also Goldman put out a buy and added shares of GTE.
http://watch.bnn.ca/market-call-tonight/january-2009/market-call-tonight-january-20-2009/#clip131620
I'm looking in the ibox for the .55 cent buyout. Isn't there a pending buyout?
It seems like those days were the best for all the AURCers.