PRE & BANK OF AMERICA
BLOOMBERG. Pacific Rubiales Energy Co. (PRE), Latin America's largest non-state oil producer, is working with Bank of America Corp. to review its strategic options as the Colombian company's share price lags competitors, according to people familiar with the matter. The stock surged yesterday.
The review may lead to a sale of Pacific, which is listed in Bogota and Toronto and has a market value of about C$6.1 billion ($5.4 billion), four of the people said. Pacific President Jose Francisco Arata said the company is "not for sale," and that Bank of America is analyzing the international market and from where an offer could come.
The Bank of America review includes defense advisory, market analysis and the sale of midstream assets, said two of the people. Repsol SA (REP), Spain's biggest oil producer, has considered an acquisition of Pacific within the past year though it decided for the time being not to pursue a deal, two of the people said. The Colombian company also held exploratory talks with Repsol last year about joint ventures in Colombia, Venezuela and Mexico, one of the people said.
Pacific shares rose 5 percent to C$19 in Toronto yesterday. Ahead of the gains the shares had fallen 15 percent in the last 12 months.
The company is negotiating with the Colombian government over the fate of its largest field once its license ends in 2016. Politicians have advocated returning the deposit to state-controlled Ecopetrol SA (ECOPETL), with which Pacific has proposed sharing some production in the future.
The Colombian producer this month announced earnings that exceeded analyst estimates after domestic output increased, leading to a rebound in the shares. Pacific is examining potential ventures in Mexico and has made more than 10 acquisitions of other companies and oil-block stakes in the past two years.
If a company makes an offer for Pacific, "we have the obligation as directors of a public company to present it to our shareholders," Arata said. "But we are not actively looking for someone to make an offer," he said, adding that Bank of America rather than the company initiated the review.
Representatives of Bank of America and Repsol declined to comment.
While Repsol looked at buying all of Pacific, uncertainty over the future of its largest oilfield made Repsol cautious about a deal, one of the people said. The Spanish company is fresh from a settlement with Argentina's government over the expropriation of its shares in local producer YPF SA (YPF), and is wary of further political entanglements, the person said.
New York-based Lazard Asset Management LLC, Capital Group Cos. in Los Angeles and BlackRock Inc. are among the biggest shareholders, according to data compiled by Bloomberg.
In Colombia, the company has attracted protests from USO, the country's largest oil union, over wages and working conditions. Chief Executive Officer Ronald Pantin has said Pacific complies with relevant labor laws.
|November, 24, 09:45:00|
|November, 24, 09:40:00|
|November, 24, 09:35:00|
|November, 24, 09:30:00|
|November, 24, 09:25:00|
|November, 24, 09:20:00|
BLOOMBERG - As Saudi Arabia led OPEC’s output cuts this year to shrink a global glut, it’s lost out on market share in the world’s biggest energy consumer. Russia in September retained the top Chinese supplier spot for the seventh straight month, while the kingdom was third.
PLATTS - The quality of Russia's key Urals crude exports towards Europe will continue to fall next year as more of the country's low-sulfur oil flows are diverted eastward to China, Russian national oil pipeline operator Transneft warned.
FT - OCI — the world’s third-largest polysilicon maker by capacity and South Korea’s biggest — this month reported a 3,373 per cent increase in operating profit to Won78.7bn ($72m) for the July-September quarter, its best performance in five years. Rival Hanwha Chemical saw third-quarter net profit jump 25 per cent to a record Won252bn.
U.S. Rig Count is up 330 rigs from last year's count of 593, with oil rigs up 273, gas rigs up 58, and miscellaneous rigs down 1 to 0. Canada Rig Count is up 41 rigs from last year's count of 174, with oil rigs up 13, gas rigs up 30, and miscellaneous rigs down 2 to 2.