columbianAssets_large (1)

Petroamerica assets (photo: company)

The oil price crash of late 2014 has been especially harsh on small-cap producers, and Colombian focused E-P Petroamerica Oil (PTA.TSXV) is no exception. Its shares have fallen over 70% since September 2014.

The company reported December 31, 2014 year end reserves yesterday evening (NR here), focusing on 2P volumes of approx 8.1mmboe and a 2P value of $175.9 million before tax using a 10% discount rate. This is a 66% increase from the previous year, largely thanks to the Suroco acquisition, which added approx 6.2 mmboe of 2P reserves. Petroamerica had negative technical revisions of 1.2 million barrels, and exploration additions of 0.5mmboe in 2014. The company's 2P value dropped from $193.8 million to $175.9 million, while its enterprise value (market cap less cash) is only $40 million.

The company said it has $53 million US cash and will repay its C $35 million debenture in April of this year, in addition to negotiating a new financing facility in the near future. The strong US dollar has helped the company ease its Canadian dollar denominated debt burden. Following the debenture repayment, Canaccord estimates Petroamerica will have US $24 million remaining to cover its H1/2014 capital program of $20.2 million, not including any proceeds from cash flow. Canaccord expects full year capex of $25-30 million, assuming oil prices remain at current levels.

The company plans to produce 5,400 barrels of oil per day in the first half of 2015, as previously expected.

Canaccord had a BUY rating and C$0.25 price target on Petroamerica's shares, which last traded at C$0.125 on Wednesday.

News release here: Petroamerica announces 2014 Year-End Reserves Increasing 2P reserves Year-on-Year by 66%

Author is a shareholder in Petroamerica Oil and has added to his position in the open market recently. This is his favourite Colombian song. Not sure the exact translation, but think it has to do with being a long suffering Colombian energy investor.