Page 14 - LatAmOil Week 15 2020

LatAmOil
NEWS IN BRIEF
LatAmOil
INVESTMENT
Ascent Resources
announces first
acquisition in Cuba
Ascent Resources, the onshore European and Caribbean/Hispanic American oil and gas com- pany, has announced its first acquisition in its wider international strategy, a change of Direc- torate and the issue of equity.
Highlights: First transaction in the Compa- ny’s Caribbean entry comprising the acquisition of Energetical, a UK Company with exclusive rights to secure a Production-Sharing Contract (PSC) on a producing onshore Cuban oil licence. Energetical delivers exclusive rights to the 9B Block in Cuba that contains the onshore Majag- uillar and San Anton fields, located on the North coast of Cuba and currently producing 190 bpd gross from three wells.
The Company is reviewing potential further acquisitions to develop a broad Cuban portfolio across both oil and gas and potentially mining, alongside the existing oil and gas asset in Slove- nia and further European growth opportunities which are under active consideration.
Andrew Dennan joins as Chief Executive Officer, subject to regulatory due diligence, to implement the wider international strategy.
Executive Chairman James Parsons com- mented: “Cuba is one of the last remaining largely untapped hydrocarbon provinces of scale. We see here, despite the recent market tur- moil and oil price collapse, the unique ingredi- ents for a new, highly material, growth trajectory across oil, gas and mining when the cycle turns. We also see near-term inflection points for Cuba, including the approaching US elections. We are therefore positioning Ascent as an advantaged platform for counter cyclical acquisitive growth with a focus on low cost production, manage- able initial capital commitments and near term re-rate potential.”
Ascent Resources, April 14 2020
PERFORMANCE
Gran Tierra Energy
provides business update
in response to oil price
volatility and COVID-19
Gran Tierra Energy today announced a busi- ness update regarding the Company’s proactive measures taken to protect its financial strength
in response to the large decrease in world oil prices and the impacts of COVID-19.
Due to the unprecedented challenges of 2020, Gran Tierra has adjusted its production volumes, capital investments and operating and general and administrative (G&A) costs to pro- tect the Company’s balance sheet and to preserve long-term value.
Temporarily Suspended Non-Profitable Pro- duction: Gran Tierra has temporarily suspended fields with zero or negative netbacks at current oil prices. Precautions to minimise restart costs have been taken in all assets secured during this interim period of low oil prices. At present, most of the Company’s minor fields have been sus- pended, resulting in the shut-in of approximately 2,500 bpd of oil. Procedures and precautions were followed to ensure mechanical and reser- voir integrity and security of the assets for an extended period, and to minimise the cost and timing of resuming production. As previously announced, another 4,000 bpd remains shut-in and water flood operations remain suspended at the Suroriente and PUT-7 Blocks in the southern Putumayo region due to a local farmers’ block- ade. With all of the shut-in fields producing from conventional reservoirs and properly suspended, the Company is confident that production and water flood operations can be resumed effi- ciently to the same pre-suspension production levels once the COVID-19, blockade and eco- nomic restrictions pass.
In addition, approximately 4,800 bpd of pro- duction that are awaiting routine mechanical workovers will remain offline during the low- price environment. The Colombian govern- ment has deemed the oil and gas industry to be a strategic sector and the continuity of the oil and
gas value chain is not restricted by government actions in response to the COVID-19 pandemic. However, some mobility and logistics issues may result in delays to the restarting of certain oil fields and mechanical workover services.
Gran Tierra remains focused on the ongoing production and water flooding of the Compa- ny’s core assets at Acordionero, Costayaco and Moqueta, which represent 81% of Gran Tierra’s WI Total Proved Reserves as of December 31, 20191.
Colombian Government Initiatives to Assist the Oil Industry: In response to the recent drop in oil prices, the Colombian government has issued new regulations that are designed to sup- port the oil industry. Gran Tierra plans to make use of these important new regulations. Decree 535 of April 10, 2020, was issued by the Ministry of Finance in order to expedite the recovery of value-added and income tax receivables from the tax authorities, to ensure that such funds are received by companies in the short-term. On April 7, 2020, the National Hydrocarbons Agency (“ANH”) issued Agreement 02, which allows oil companies to reduce substantially the amounts covered by letters of credit for block commitments. This new agreement also grants oil companies the option to request 12 months of additional time for the execution of exploration, evaluation and certain exploitation commitments.
First Quarter 2020 Production: During this time period, Gran Tierra’s production averaged approximately 29,530 bpd.
New Hedges: Gran Tierra has entered into additional 2020 oil price hedges to provide fur- ther downside protection against a near-term, low price environment by securing costless Brent
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Week 15 16•April•2020