x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2012
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM __________ TO __________
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Nevada
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98-0479924
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. employer
identification number)
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300, 625 11 Avenue S.W.
Calgary, Alberta, Canada
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T2R 0E1
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(Address of principal executive offices)
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(Zip code)
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Large Accelerated Filer
x
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Accelerated Filer
o
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Non-Accelerated Filer
o
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(do not check if a smaller reporting company) Smaller Reporting
Company
o
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Page
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PART I
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Item 1.
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5
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Item 2.
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18
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Item 3.
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32
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Item 4.
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32
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PART II
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Item 1.
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32
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Item 1A.
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33
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Item 2.
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41
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Item 5
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41
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Item 6.
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41
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41
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42
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bbl
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barrel
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BOPD
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barrels of oil per day
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Mbbl
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thousand barrels
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Mcf
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thousand cubic feet
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MMbbl
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million barrels
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MMcf
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million cubic feet
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BOE
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barrels of oil equivalent
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Bcf
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billion cubic feet
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MMBOE
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million barrels of oil equivalent
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NGL
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natural gas liquids
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BOEPD
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barrels of oil equivalent per day
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NAR
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net after royalty
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●
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Reserves.
Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and gas or related substances to market, and all permits and financing required to implement the project.
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●
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Proved oil and gas reserves.
Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.
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(i)
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The area of the reservoir considered as proved includes:
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A.
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The area identified by drilling and limited by fluid contacts, if any, and
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B.
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Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.
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(ii)
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In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.
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(iii)
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Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.
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(iv)
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Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when:
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A.
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Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and.
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B.
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The project has been approved for development by all necessary parties and entities, including governmental entities.
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(v)
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Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.
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●
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Reasonable Certainty.
If deterministic methods are used, reasonable certainty means a high degree of confidence that the quantities will be recovered. A high degree of confidence exists if the quantity is much more likely to be achieved than not, and as changes due to increased availability of geoscience (geological, geophysical and geochemical), engineering and economic data are made to estimated ultimate recovery (EUR) with time, reasonably certain EUR is much more likely to increase or remain constant than to decrease
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●
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Deterministic estimate.
The method of estimating reserves or resources is called deterministic when a single value for each parameter (from the geoscience, engineering, or economic data) in the reserves calculation is used in the reserves estimation procedure.
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Three Months Ended March 31,
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||||||||
2012
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2011
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|||||||
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|||||||
REVENUE AND OTHER INCOME
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||||||
Oil and natural gas sales
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$ | 155,248 | $ | 122,296 | ||||
Interest income
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703 | 223 | ||||||
155,951 | 122,519 | |||||||
EXPENSES
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||||||||
Operating
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24,487 | 16,396 | ||||||
Depletion, depreciation, accretion and impairment (Note 5)
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60,367 | 63,357 | ||||||
General and administrative
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15,899 | 13,638 | ||||||
Equity tax (Note 8)
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- | 8,050 | ||||||
Financial instruments gain (Notes 3 and 6)
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- | (230 | ) | |||||
Gain on acquisition (Note 3)
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- | (24,300 | ) | |||||
Foreign exchange loss
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24,375 | 5,199 | ||||||
125,128 | 82,110 | |||||||
INCOME BEFORE INCOME TAXES
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30,823 | 40,409 | ||||||
Income tax expense (Note 8)
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(31,136 | ) | (26,696 | ) | ||||
NET (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME
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(313 | ) | 13,713 | |||||
RETAINED EARNINGS, BEGINNING OF PERIOD
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185,014 | 58,097 | ||||||
RETAINED EARNINGS, END OF PERIOD
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$ | 184,701 | $ | 71,810 | ||||
NET (LOSS) INCOME PER SHARE — BASIC
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$ | (0.00 | ) | $ | 0.05 | |||
NET (LOSS) INCOME PER SHARE — DILUTED
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$ | (0.00 | ) | $ | 0.05 | |||
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC (Note 6)
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278,734,280 | 260,930,753 | ||||||
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED (Note 6)
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278,734,280 | 267,819,800 |
March 31,
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December 31,
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|||||||
2012
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2011
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|||||||
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||||||||
ASSETS
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||||||
Current Assets
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||||||
Cash and cash equivalents
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$ | 230,076 | $ | 351,685 | ||||
Restricted cash
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2,880 | 1,655 | ||||||
Accounts receivable
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145,606 | 69,362 | ||||||
Inventory (Note 5)
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14,339 | 7,116 | ||||||
Taxes receivable
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19,501 | 21,485 | ||||||
Prepaids
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4,215 | 3,597 | ||||||
Deferred tax assets (Note 8)
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3,229 | 3,029 | ||||||
Total Current Assets
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419,846 | 457,929 | ||||||
Oil and Gas Properties (using the full cost method of accounting)
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||||||||
Proved
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627,620 | 618,982 | ||||||
Unproved
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433,530 | 417,868 | ||||||
Total Oil and Gas Properties
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1,061,150 | 1,036,850 | ||||||
Other capital assets
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8,441 | 7,992 | ||||||
Total Property, Plant and Equipment (Note 5)
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1,069,591 | 1,044,842 | ||||||
Other Long-Term Assets
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||||||||
Restricted cash
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43,039 | 13,227 | ||||||
Deferred tax assets (Note 8)
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6,462 | 4,747 | ||||||
Other long-term assets
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4,994 | 3,454 | ||||||
Goodwill
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102,581 | 102,581 | ||||||
Total Other Long-Term Assets
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157,076 | 124,009 | ||||||
Total Assets
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$ | 1,646,513 | $ | 1,626,780 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
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Current Liabilities
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Accounts payable
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$ | 37,775 | $ | 82,189 | ||||
Accrued liabilities
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90,238 | 66,832 | ||||||
Taxes payable
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120,328 | 95,482 | ||||||
Asset retirement obligation (Note 7)
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- | 326 | ||||||
Total Current Liabilities
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248,341 | 244,829 | ||||||
Long-Term Liabilities
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||||||||
Deferred tax liability (Note 8)
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198,505 | 186,799 | ||||||
Equity tax payable (Note 8)
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7,029 | 6,484 | ||||||
Asset retirement obligation (Note 7)
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12,124 | 12,343 | ||||||
Other long-term liabilities
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2,187 | 2,007 | ||||||
Total Long-Term Liabilities
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219,845 | 207,633 | ||||||
Commitments and Contingencies (Note 9)
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||||||||
Shareholders’ Equity
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||||||||
Common shares (Note 6) (264,256,159 and 262,304,249 common shares and 14,717,917 and 16,323,819 exchangeable shares, par value $0.001 per share, issued and outstanding as at March 31, 2012 and December 31, 2011, respectively)
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7,983 | 7,510 | ||||||
Additional paid in capital
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983,919 | 980,014 | ||||||
Warrants (Note 6)
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1,724 | 1,780 | ||||||
Retained earnings
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184,701 | 185,014 | ||||||
Total Shareholders’ Equity
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1,178,327 | 1,174,318 | ||||||
Total Liabilities and Shareholders’ Equity
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$ | 1,646,513 | $ | 1,626,780 |
Three Months Ended March 31,
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||||||||
2012
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2011
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|||||||
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||||||||
Operating Activities
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Net (loss) income
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$ | (313 | ) | $ | 13,713 | |||
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
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||||||||
Depletion, depreciation, accretion and impairment
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60,367 | 63,357 | ||||||
Deferred taxes (Note 8)
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(5,250 | ) | (187 | ) | ||||
Stock-based compensation (Note 6)
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3,192 | 3,453 | ||||||
Gain on financial instruments (Note 3)
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- | (62 | ) | |||||
Unrealized foreign exchange loss
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21,351 | 4,458 | ||||||
Settlement of asset retirement obligation (Note 7)
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(404 | ) | (4 | ) | ||||
Equity tax
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- | 6,132 | ||||||
Gain on acquisition (Note 3)
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- | (24,300 | ) | |||||
Net change in assets and liabilities from operating activities
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||||||||
Accounts receivable
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(72,865 | ) | (83,036 | ) | ||||
Inventory
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(4,500 | ) | 736 | |||||
Prepaids
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(618 | ) | (831 | ) | ||||
Accounts payable and accrued and other liabilities
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(34,035 | ) | (22,756 | ) | ||||
Taxes receivable and payable
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19,595 | 8,101 | ||||||
Net cash used in operating activities
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(13,480 | ) | (31,226 | ) | ||||
Investing Activities
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||||||||
Increase in restricted cash
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(31,037 | ) | (5,600 | ) | ||||
Additions to property, plant and equipment
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(77,983 | ) | (77,516 | ) | ||||
Proceeds from disposition of oil and gas property (Note 5)
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- | 3,253 | ||||||
Cash acquired on acquisition (Note 3)
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- | 7,747 | ||||||
Proceeds on sale of asset-backed commercial paper (Note 3)
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- | 22,679 | ||||||
Net cash used in investing activities
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(109,020 | ) | (49,437 | ) | ||||
Financing Activities
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||||||||
Settlement of bank debt (Notes 3 and 11)
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- | (22,853 | ) | |||||
Proceeds from issuance of common shares
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891 | 1,989 | ||||||
Net cash provided by (used in) financing activities
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891 | (20,864 | ) | |||||
Net decrease in cash and cash equivalents
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(121,609 | ) | (101,527 | ) | ||||
Cash and cash equivalents, beginning of period
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351,685 | 355,428 | ||||||
Cash and cash equivalents, end of period
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$ | 230,076 | $ | 253,901 | ||||
Cash
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$ | 148,035 | $ | 243,399 | ||||
Term deposits
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82,041 | 10,502 | ||||||
Cash and cash equivalents, end of period
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$ | 230,076 | $ | 253,901 | ||||
Supplemental cash flow disclosures:
|
||||||||
Cash paid for interest
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$ | - | $ | 668 | ||||
Cash paid for income taxes
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$ | 13,733 | $ | 9,693 | ||||
Non-cash investing activities:
|
||||||||
Non-cash working capital related to property, plant and equipment, end of period
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$ | 53,090 | $ | 42,698 |
Three Months Ended
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Year Ended
|
|||||||
March 31, 2012
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December 31, 2011
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|||||||
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||||||||
Share Capital
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|
|
||||||
Balance, beginning of period
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$ | 7,510 | $ | 4,797 | ||||
Issue of common shares
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473 | 2,713 | ||||||
Balance, end of period
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7,983 | 7,510 | ||||||
Additional Paid in Capital
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||||||||
Balance, beginning of period
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980,014 | 821,781 | ||||||
Issue of common shares
|
105 | 142,109 | ||||||
Exercise of warrants (Note 6)
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56 | 411 | ||||||
Exercise of stock options (Note 6)
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313 | 1,990 | ||||||
Stock-based compensation (Note 6)
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3,431 | 13,723 | ||||||
Balance, end of period
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983,919 | 980,014 | ||||||
Warrants
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||||||||
Balance, beginning of period
|
1,780 | 2,191 | ||||||
Exercise of warrants (Note 6)
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(56 | ) | (411 | ) | ||||
Balance, end of period
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1,724 | 1,780 | ||||||
Retained Earnings
|
||||||||
Balance, beginning of period
|
185,014 | 58,097 | ||||||
Net (loss) income
|
(313 | ) | 126,917 | |||||
Balance, end of period
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184,701 | 185,014 | ||||||
Total Shareholders’ Equity
|
$ | 1,178,327 | $ | 1,174,318 |
Exercise price (CDN dollars per warrant)
|
$ | 9.67 | ||
Risk-free interest rate
|
1.3 | % | ||
Expected life
|
0.45 Years
|
|||
Volatility
|
44 | % | ||
Expected annual dividend per share
|
Nil
|
|||
Estimated fair value per warrant (CDN dollars)
|
$ | 0.32 |
(Thousands of U.S. Dollars)
|
|
|||
Consideration Transferred:
|
|
|||
Common shares issued net of share issue costs
|
$ | 141,690 | ||
Replacement warrants
|
1,354 | |||
$ | 143,044 | |||
Allocation of Consideration Transferred:
|
||||
Oil and gas properties
|
||||
Proved
|
$ | 58,457 | ||
Unproved
|
161,278 | |||
Other long-term assets
|
4,417 | |||
Net working capital (including cash acquired of $7.7 million and accounts receivable of $6.4 million)
|
(17,223 | ) | ||
Asset retirement obligation
|
(4,901 | ) | ||
Bank debt
|
(22,853 | ) | ||
Other long-term liabilities
|
(14,432 | ) | ||
Gain on acquisition
|
(21,699 | ) | ||
$ | 143,044 |
Three Months Ended
March 31,
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||||
(Thousands of U.S. Dollars except per share amounts)
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2011
|
|||
Revenue and other income
|
$ | 131,714 | ||
Net loss
|
$ | (21,711 | ) | |
Net loss per share - basic
|
$ | (0.08 | ) | |
Net loss per share - diluted
|
$ | (0.08 | ) |
(Thousands of U.S. Dollars except per unit of production amounts) |
Three Months Ended March 31, 2012
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|||||||||||||||||||
Colombia
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Argentina | Peru | All Other | Total | ||||||||||||||||
Oil and natural gas sales
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$ | 138,633 | $ | 15,369 | $ | - | $ | 1,246 | $ | 155,248 | ||||||||||
Interest income
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204 | 47 | 15 | 437 | 703 | |||||||||||||||
Depletion, depreciation, accretion and impairment
|
32,286 | 5,925 | 115 | 22,041 | 60,367 | |||||||||||||||
Depletion, depreciation, accretion and impairment - per unit of production
|
25.80 | 22.80 | - | 1,741.47 | 39.62 | |||||||||||||||
Income (loss) before income taxes
|
60,120 | (477 | ) | (727 | ) | (28,093 | ) | 30,823 | ||||||||||||
Segment capital expenditures
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$ | 20,349 | $ | 14,105 | $ | 16,655 | $ | 36,482 | $ | 87,591 | ||||||||||
Three Months Ended March 31, 2011 | ||||||||||||||||||||
(Thousands of U.S. Dollars except per unit of production amounts)
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Colombia
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Argentina
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Peru
|
All Other
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Total
|
|||||||||||||||
Oil and natural gas sales
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$ | 117,304 | $ | 4,992 | $ | - | $ | - | $ | 122,296 | ||||||||||
Interest income
|
87 | - | - | 136 | 223 | |||||||||||||||
Depletion, depreciation, accretion and impairment
|
30,036 | 1,147 | 31,933 | 241 | 63,357 | |||||||||||||||
Depletion, depreciation, accretion and impairment - per unit of production
|
24.77 | 11.90 | - | - | 48.39 | |||||||||||||||
Income (loss) before income taxes
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57,886 | (430 | ) | (32,625 | ) | 15,578 | 40,409 | |||||||||||||
Segment capital expenditures (1)
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$ | 42,264 | $ | 11,622 | $ | 14,287 | $ | 930 | $ | 69,103 |
(Thousands of U.S. Dollars) |
As at March 31, 2012
|
|||||||||||||||||||
Colombia
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Argentina
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Peru
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All Other
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Total
|
||||||||||||||||
Property, plant and equipment
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$ | 801,810 | 137,414 | 50,845 | 79,522 | $ | 1,069,591 | |||||||||||||
Goodwill
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102,581 | - | - | - | 102,581 | |||||||||||||||
Other assets
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269,744 | 38,103 | 8,602 | 157,892 | 474,341 | |||||||||||||||
Total Assets
|
$ | 1,174,135 | $ | 175,517 | $ | 59,447 | $ | 237,414 | $ | 1,646,513 | ||||||||||
As at December 31, 2011 | ||||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
Argentina
|
Peru
|
All Other
|
Total
|
|||||||||||||||
Property, plant and equipment
|
$ | 816,396 | 129,072 | 34,305 | 65,069 | $ | 1,044,842 | |||||||||||||
Goodwill
|
102,581 | - | - | - | 102,581 | |||||||||||||||
Other assets
|
269,843 | 34,672 | 9,597 | 165,245 | 479,357 | |||||||||||||||
Total Assets
|
$ | 1,188,820 | $ | 163,744 | $ | 43,902 | $ | 230,314 | $ | 1,626,780 |
|
As at March 31, 2012
|
As at December 31, 2011
|
||||||||||||||||||||||
(Thousands of U.S. Dollars)
|
Cost
|
Accumulated
depletion,
depreciation
and
impairment
|
Net book value
|
Cost
|
Accumulated
depletion,
depreciation
and
impairment
|
Net book value
|
||||||||||||||||||
Oil and natural gas properties
|
|
|
|
|
|
|
||||||||||||||||||
Proved
|
$ | 1,252,252 | (624,632 | ) | 627,620 | $ | 1,181,503 | $ | (562,521 | ) | $ | 618,982 | ||||||||||||
Unproved
|
433,530 | - | 433,530 | 417,868 | - | 417,868 | ||||||||||||||||||
1,685,782 | (624,632 | ) | 1,061,150 | 1,599,371 | (562,521 | ) | 1,036,850 | |||||||||||||||||
Furniture and fixtures and leasehold improvements
|
7,226 | (4,457 | ) | 2,769 | 6,973 | (4,002 | ) | 2,971 | ||||||||||||||||
Computer equipment
|
9,370 | (4,422 | ) | 4,948 | 8,443 | (4,174 | ) | 4,269 | ||||||||||||||||
Automobiles
|
1,295 | (571 | ) | 724 | 1,295 | (543 | ) | 752 | ||||||||||||||||
Total Property, Plant and Equipment
|
$ | 1,703,673 | $ | (634,082 | ) | $ | 1,069,591 | $ | 1,616,082 | $ | (571,240 | ) | $ | 1,044,842 |
|
Three Months Ended March 31, 2012
|
|||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
Argentina
|
Peru
|
Brazil
|
Total
|
|||||||||||||||
Capitalized G&A, including stock-based compensation
|
$ | 1,852 | $ | 1,080 | $ | 927 | $ | 1,068 | $ | 4,927 | ||||||||||
Capitalized stock-based compensation
|
$ | 114 | $ | 66 | $ | - | $ | 59 | $ | 239 | ||||||||||
Three Months Ended March 31, 2011
|
||||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
Argentina
|
Peru
|
Brazil
|
Total
|
|||||||||||||||
Capitalized G&A, including stock-based compensation
|
$ | 1,815 | $ | 410 | $ | 294 | $ | - | $ | 2,519 | ||||||||||
Capitalized stock-based compensation
|
$ | 76 | $ | 47 | $ | - | $ | - | $ | 123 |
Exercise price (CDN dollars per warrant)
|
|
$
|
9.67
|
|
Risk-free interest rate
|
|
|
1.3
|
%
|
Expected life
|
|
0.45 Years
|
|
|
Volatility
|
|
|
44
|
%
|
Expected annual dividend per share
|
|
Nil
|
|
|
Estimated fair value per warrant (CDN dollars)
|
|
$
|
0.32
|
|
Number of
Outstanding
|
Weighted Average
Exercise Price
|
|||||||
Balance, December 31, 2011
|
12,864,002 | $ | 4.90 | |||||
Granted in 2012
|
3,213,150 | 5.81 | ||||||
Exercised in 2012
|
(246,005 | ) | (3.20 | ) | ||||
Forfeited in 2012
|
(136,646 | ) | (7.05 | ) | ||||
Balance, March 31, 2012
|
15,694,501 | $ | 5.10 |
Three Months Ended March 31,
|
||||
|
2012
|
|||
Dividend yield (per share) | $ | nil | ||
Volatility
|
75 | % | ||
Risk-free interest rate
|
0.4 | % | ||
Expected term
|
4-6 years
|
Three Months Ended March 31,
|
||||||||
|
2012
|
2011
|
||||||
Weighted average number of common and exchangeable shares outstanding
|
278,734,280 | 260,930,753 | ||||||
Shares issuable pursuant to warrants
|
- | 3,203,257 | ||||||
Shares issuable pursuant to stock options
|
- | 5,894,518 | ||||||
Shares to be purchased from proceeds of stock options
|
- | (2,208,728 | ) | |||||
Weighted average number of diluted common and exchangeable shares outstanding
|
278,734,280 | 267,819,800 |
Three Months Ended
|
Year Ended
|
|||||||
(Thousands of U.S. Dollars)
|
March 31, 2012
|
December 31, 2011
|
||||||
Balance, beginning of period
|
$ | 12,669 | $ | 4,807 | ||||
Settlements
|
(404 | ) | (345 | ) | ||||
Disposal
|
- | (172 | ) | |||||
Liability incurred
|
193 | 867 | ||||||
Liability assumed in a business combination (Note 3)
|
- | 4,901 | ||||||
Foreign exchange
|
35 | 17 | ||||||
Accretion
|
247 | 673 | ||||||
Revisions in estimated liability
|
(616 | ) | 1,921 | |||||
Balance, end of period
|
$ | 12,124 | $ | 12,669 | ||||
Asset retirement obligation - current
|
$ | - | $ | 326 | ||||
Asset retirement obligation – long-term
|
12,124 | 12,343 | ||||||
Balance, end of period
|
$ | 12,124 | $ | 12,669 |
Three Months Ended March 31,
|
|||||||
(Thousands of U.S. Dollars)
|
2012
|
2011
|
|||||
Income before income taxes
|
$ | 30,823 | $ | 40,409 | |||
35 | % | 35 | % | ||||
Income tax expense expected
|
10,788 | 14,143 | |||||
Foreign currency translation adjustments
|
8,718 | 1,981 | |||||
Impact of foreign taxes
|
(631 | ) | (1,598 | ) | |||
Stock-based compensation
|
1,003 | 1,143 | |||||
Increase in valuation allowance
|
10,145 | 15,288 | |||||
Branch and other foreign loss pick-up in the United States and Canada
|
(622 | ) | (1,619 | ) | |||
Non-deductible third party royalty in Colombia
|
1,943 | 1,820 | |||||
Non-taxable gain on acquisition
|
- | (8,527 | ) | ||||
Other permanent differences
|
(208 | ) | 4,065 | ||||
Total income tax expense
|
$ | 31,136 | $ | 26,696 | |||
Current income tax
|
36,384 | 26,677 | |||||
Deferred tax recovery
|
(5,248 | ) | 19 | ||||
Total income tax expense
|
$ | 31,136 | $ | 26,696 | |||
As at
|
|||||||
(Thousands of U.S. Dollars)
|
March 31, 2012
|
December 31, 2011
|
|||||
Deferred Tax Assets
|
|||||||
Tax benefit of loss carryforwards
|
$ | 73,645 | $ | 63,910 | |||
Tax basis in excess of book basis
|
15,732 | 17,065 | |||||
Foreign tax credits and other accruals
|
27,224 | 27,164 | |||||
Capital losses
|
2,494 | 2,433 | |||||
Deferred tax assets before valuation allowance
|
119,095 | 110,572 | |||||
Valuation allowance
|
(109,404 | ) | (102,796 | ) | |||
$ | 9,691 | $ | 7,776 | ||||
Deferred tax assets - current
|
$ | 3,229 | $ | 3,029 | |||
Deferred tax assets - long-term
|
6,462 | 4,747 | |||||
9,691 | 7,776 | ||||||
Deferred Tax Liabilities
|
|||||||
Long-term - book value in excess of tax basis
|
(198,505 | ) | (186,799 | ) | |||
Net Deferred Tax Liabilities
|
$ | (188,814 | ) | $ | (179,023 | ) |
Three Months Ended March 31,
|
||||||||
2012
|
2011
|
|||||||
(Thousands of U.S. Dollars)
|
||||||||
Unrecognized tax benefit at January 1
|
$ | 20,500 | $ | 4,175 | ||||
Changes for positions relating to prior year
|
- | 70 | ||||||
Additions to tax position related to the current year
|
- | 12,364 | ||||||
Unrecognized tax benefit at March 31
|
$ | 20,500 | $ | 16,609 |
As at March 31, 2012
|
||||||||||||||||||||
Payments Due in Period
|
||||||||||||||||||||
Total
|
Less than 1
Year
|
1 to 3 years
|
3 to 5 years
|
More than 5
years
|
||||||||||||||||
(Thousands of U.S. Dollars)
|
|
|
|
|
|
|||||||||||||||
Oil transportation services
|
$ | 36,922 | $ | 13,072 | $ | 7,100 | $ | 7,100 | $ | 9,650 | ||||||||||
Drilling and geological and geophysical
|
58,336 | 47,086 | 11,250 | - | - | |||||||||||||||
Completions
|
24,821 | 19,201 | 5,620 | - | - | |||||||||||||||
Facility construction
|
41,389 | 24,557 | 16,832 | - | - | |||||||||||||||
Operating leases
|
7,661 | 3,085 | 3,142 | 1,434 | - | |||||||||||||||
Software and telecommunication
|
4,790 | 3,811 | 979 | - | - | |||||||||||||||
Consulting
|
1,989 | 1,989 | - | - | - | |||||||||||||||
Total
|
$ | 175,908 | 112,801 | 44,923 | 8,534 | 9,650 |
Three Months Ended March 31,
|
||||||||||||
2012
|
2011
|
% Change
|
||||||||||
Production (BOEPD) (1)
|
16,742 | 14,546 | 15 | |||||||||
Prices Realized - per BOE
|
$ | 101.90 | $ | 93.41 | 9 | |||||||
Revenue and Other Income ($000s)
|
$ | 155,951 | $ | 122,519 | 27 | |||||||
Net (Loss) Income ($000s)
|
$ | (313 | ) | $ | 13,713 | (102 | ) | |||||
Net (Loss) Income Per Share - Basic
|
$ | (0.00 | ) | $ | 0.05 | (100 | ) | |||||
Net (Loss) Income Per Share - Diluted
|
$ | (0.00 | ) | $ | 0.05 | (100 | ) | |||||
Funds Flow From Operations ($000s) (2)
|
$ | 78,943 | $ | 66,560 | 19 | |||||||
Capital Expenditures ($000s)
|
$ | 87,591 | $ | 69,103 | 27 |
As at
|
||||||||||||
March 31, 2012
|
December 31, 2011
|
% Change
|
||||||||||
Cash & Cash Equivalents ($000s)
|
$ | 230,076 | $ | 351,685 | (35 | ) | ||||||
Working Capital (including cash & cash equivalents) ($000s)
|
$ | 171,505 | $ | 213,100 | (20 | ) | ||||||
Property, Plant & Equipment ($000s)
|
$ | 1,069,591 | $ | 1,044,842 | 2 |
Three Months Ended March 31,
|
||||||||
Funds Flow From Operations - Non-GAAP Measure ($000s)
|
2012
|
2011
|
||||||
|
|
|||||||
Net (loss) income
|
$ | (313 | ) | $ | 13,713 | |||
Adjustments to reconcile net (loss) income to funds flow from operations
|
||||||||
DD&A expenses
|
60,367 | 63,357 | ||||||
Deferred taxes
|
(5,250 | ) | (187 | ) | ||||
Stock-based compensation
|
3,192 | 3,453 | ||||||
Gain on financial instruments
|
- | (62 | ) | |||||
Unrealized foreign exchange loss
|
21,351 | 4,458 | ||||||
Settlement of asset retirement obligation
|
(404 | ) | (4 | ) | ||||
Equity tax
|
- | 6,132 | ||||||
Gain on acquisition
|
- | (24,300 | ) | |||||
Funds flows from operations
|
$ | 78,943 | $ | 66,560 |
·
|
In the first quarter of 2012, oil and natural gas production, NAR and adjusted for inventory changes, averaged 16,742 BOEPD, an increase of 15% over the first quarter of 2011. The increase was due to increased production from the Moqueta and Jilguero fields in Colombia and the Neuquen Basin in Argentina, partially offset by the impact of pipeline disruptions and an increase in pipeline inventory as a result of the change in the sales point in Colombia.
|
|
·
|
In Colombia, the Ramiriqui-1 oil exploration well reached total depth at 19,519 feet measured depth (“MD”) in basement. Along with our operating partner Compania Espanola de Petroleos, S.A.U. (“CEPSA”), we completed initial testing on the well with natural flow rates, without pumps, of up to 2,525 BOPD gross over 32.5 hours with a 28/64 inch choke and a 0.12% watercut with 26°API gravity oil from the Mirador formation. The Ramiriqui-1 well flowed at a restricted rate due to gas flaring limitations. We are awaiting approval from the Agencia Nacional de Hidrocarburos (National Hydrocarbons Agency) (“ANH”) of the transfer of our 45% working interest in this Block.
|
|
·
|
In Colombia, we completed the Moqueta 3D seismic program with interpretation ongoing to assist in full field development planning.
|
·
|
In Argentina, we completed drilling and testing the Proa -2 appraisal well, the second well in the Proa oil field. The well went on production in the second quarter of 2012 at a constrained rate of approximately 2,000 BOPD gross to further analyze reservoir performance while additional transportation capacity is evaluated.
|
|
·
|
In Brazil, the 3-GTE-03D-BA appraisal well reached a total depth of 2,273 meters MD during the first quarter of 2012 and oil bearing reservoir intervals were encountered. Additionally, a second appraisal well, 3-GTE-4DPA-BA, encountered the Agua Grande formation at 2,065 meters MD and the Sergi formation at 2,182 meters MD.
|
·
|
In September 2011, we announced two farmout agreements with Statoil do Brasil Ltda. ("Statoil") in a joint venture with PetróleoBrasileiro S.A. ("Petrobras"), in Brazil’s deepwater offshore Camamu-Almada Basin, pursuant to which, we would receive an assignment of a non-operated 10% working interest in Block BM-CAL-7 and a non-operated 15% working interest in Block BM-CAL-10. On February 17, 2012, in accordance with the terms of the farmout agreement, we gave notice to Statoil that we would not enter into and assume our share of the work obligations of the second exploration period of Block BM-CAL-10. As a result, the farmout agreement has terminated and we will not receive any interest in the block. We paid $23.8 million in the second quarter of 2012 related to our obligation on this farmout agreement.
|
·
|
During the first quarter of 2012, we received regulatory approval from the ANP in Brazil for the Block BM-CAL-7
farmout agreement
and the assignment became effective on April 3, 2012
.
|
·
|
On January 20, 2012, we entered into a purchase and sale agreement to acquire the remaining 30% participating
interest in Blocks 129, 142, 155 and 224
in the Recôncavo Basin
in Brazil from our partner. The completion of the purchase is subject to ANP approval.
|
●
|
Revenue and other income increased by 27% to $156.0 million in the first quarter of 2012 compared with $122.5 million in the first quarter of 2011 due to increased production and higher oil prices. Average oil and NGL prices realized per bbl in the first quarter of 2012 were $105.36, an increase of 12% compared with $94.31 in the first quarter of 2011. |
●
|
We incurred a net loss of $0.3 million in the first quarter of 2012, representing basic and diluted net loss per share of $nil. This compares with net income of $13.7 million, or $0.05 per share basic and diluted in the first quarter of 2011. In the first quarter of 2012, i ncreased oil and natural gas sales, reduced impairment charges and no Colombian equity tax expense were more than offset by a $24.4 million foreign exchange loss, the absence of the comparative period gain on acquisition, increased operating, depletion, depreciation and accretion and general and administrative ("G&A") expenses and increased income taxes. Net income in the comparable quarter in 2011 included a gain on the acquisition of Petrolifera Petroleum Limited (“Petrolifera”) of $24.3 million and Colombian equity tax of $8.1 million. The Colombian equity tax is assessed every four years. |
●
|
Funds flow from operations increased by 19% to $78.9 million in the first quarter of 2012 from $66.6 million in the first quarter of 2011. The increase was primarily due to increased oil and natural gas sales and no Colombian equity tax expense , partially offset by increased operating and G&A expenses. |
|
●
|
Cash and cash equivalents was $230.1 million at March 31, 2012 compared with $351.7 million at December 31, 2011. The change in cash and cash equivalents during the first quarter of 2012 was primarily the result of funds flow from operations of $78.9 million and proceeds from issuance of common shares of $0.9 million being more than offset by an increase in net assets from operating activities of $92.4 million, $78.0 million of capital expenditures and a $31.0 million increase in restricted cash during the first quarter of 2012.
|
|
●
|
Working capital (including cash and cash equivalents) was $171.5 million at March 31, 2012, a $41.6 million decrease from December 31, 2011.The decrease is a result of a $121.6 million decrease in cash and cash equivalents and a $24.8 million increase in taxes payable due to increased taxable income in Colombia, partially offset by a $76.2 million increase in accounts receivable due to increased sales and the timing of collection of receivables, a $7.2 million increase in inventory due to the new transportation agreement in Colombia and a $21.0 million decrease in accounts payable and accrued liabilities. The decrease in accounts payable and accrued liabilities was primarily the result of a $19.0 million reduction in royalties payable due to the timing of royalty payments and a $13.7 million reduction in VAT payable, partially offset by a $12.0 million increase in capital expenditure related liabilities. Capital expenditure related accounts payable included $23.8 million related to the Block BM-CAL-10 at March 31, 2012.
|
●
|
Property, plant and equipment at March 31, 2012 was $1.1 billion, an increase of $24.7 million from December 31, 2011, as a result of $87.6 million of capital expenditures, partially offset by $62.9 million of depletion, depreciation and impairment expenses.
|
Three Months Ended March 31,
|
||||||||||||
2012
|
2011
|
% Change
|
||||||||||
(Thousands of U.S. Dollars)
|
|
|
|
|||||||||
Oil and natural gas sales
|
$ | 155,248 | $ | 122,296 | 27 | |||||||
Interest income
|
703 | 223 | 215 | |||||||||
155,951 | 122,519 | 27 | ||||||||||
Operating expenses
|
24,487 | 16,396 | 49 | |||||||||
DD&A expenses
|
60,367 | 63,357 | (5 | ) | ||||||||
G&A expenses
|
15,899 | 13,638 | 17 | |||||||||
Equity tax
|
- | 8,050 | - | |||||||||
Financial instruments gain
|
- | (230 | ) | - | ||||||||
Gain on acquisition
|
- | (24,300 | ) | - | ||||||||
Foreign exchange loss
|
24,375 | 5,199 | 369 | |||||||||
125,128 | 82,110 | 52 | ||||||||||
Income before income taxes
|
30,823 | 40,409 | (24 | ) | ||||||||
Income tax expense
|
(31,136 | ) | (26,696 | ) | 17 | |||||||
Net (loss) income
|
$ | (313 | ) | $ | 13,713 | (102 | ) | |||||
Production | ||||||||||||
Oil and NGL's, bbl
|
1,461,404 | 1,293,453 | 13 | |||||||||
Natural gas, Mcf
|
372,947 | 94,317 | 295 | |||||||||
Total production, BOE (1)
|
1,523,562 | 1,309,173 | 16 | |||||||||
Average Prices
|
||||||||||||
Oil and NGL's, per bbl
|
$ | 105.36 | $ | 94.31 | 12 | |||||||
Natural gas, per Mcf
|
$ | 3.42 | $ | 3.35 | 2 | |||||||
Consolidated Results of Operations (per BOE)
|
||||||||||||
Oil and natural gas sales
|
$ | 101.90 | $ | 93.41 | 9 | |||||||
Interest income
|
0.46 | 0.17 | 171 | |||||||||
102.36 | 93.58 | 9 | ||||||||||
Operating expenses
|
16.07 | 12.52 | 28 | |||||||||
DD&A expenses
|
39.62 | 48.39 | (18 | ) | ||||||||
G&A expenses
|
10.44 | 10.42 | - | |||||||||
Equity tax
|
- | 6.15 | - | |||||||||
Financial instruments gain
|
- | (0.18 | ) | - | ||||||||
Gain on acquisition
|
- | (18.56 | ) | - | ||||||||
Foreign exchange loss
|
16.00 | 3.97 | 303 | |||||||||
82.13 | 62.71 | 31 | ||||||||||
Income before income taxes
|
20.23 | 30.87 | (34 | ) | ||||||||
Income tax expense
|
(20.44 | ) | (20.39 | ) | - | |||||||
Net (loss) income
|
$ | (0.21 | ) | $ | 10.48 | (102 | ) |
Three Months Ended March 31,
|
||||||||||||
2012
|
2011
|
% Change
|
||||||||||
(Thousands of U.S. Dollars)
|
|
|
|
|||||||||
Oil and natural gas sales
|
$ | 138,633 | $ | 117,304 | 18 | |||||||
Interest income
|
204 | 87 | 134 | |||||||||
138,837 | 117,391 | 18 | ||||||||||
Operating expenses
|
16,474 | 12,785 | 29 | |||||||||
DD&A expenses
|
32,286 | 30,036 | 7 | |||||||||
G&A expenses
|
6,599 | 3,313 | 99 | |||||||||
Equity tax
|
- | 8,050 | - | |||||||||
Foreign exchange loss
|
23,358 | 5,321 | 339 | |||||||||
78,717 | 59,505 | 32 | ||||||||||
Segment income before income taxes
|
$ | 60,120 | $ | 57,886 | 4 | |||||||
Production
|
||||||||||||
Oil and NGL's, bbl
|
1,249,581 | 1,203,615 | 4 | |||||||||
Natural gas, Mcf
|
9,474 | 55,257 | (83 | ) | ||||||||
Total production, BOE (1)
|
1,251,160 | 1,212,825 | 3 | |||||||||
Average Prices
|
||||||||||||
Oil and NGL's, per bbl
|
$ | 110.92 | $ | 97.27 | 14 | |||||||
Natural gas, per Mcf
|
$ | 3.39 | $ | 4.04 | (16 | ) | ||||||
Segmented Results of Operations (per BOE)
|
||||||||||||
Oil and natural gas sales
|
$ | 110.80 | $ | 96.72 | 15 | |||||||
Interest income
|
0.16 | 0.07 | 129 | |||||||||
110.96 | 96.79 | 15 | ||||||||||
Operating expenses
|
13.17 | 10.54 | 25 | |||||||||
DD&A expenses
|
25.80 | 24.77 | 4 | |||||||||
G&A expenses
|
5.27 | 2.73 | 93 | |||||||||
Equity tax
|
- | 6.64 | - | |||||||||
Foreign exchange loss
|
18.67 | 4.39 | (325 | ) | ||||||||
62.91 | 49.07 | 28 | ||||||||||
Segment income before income taxes
|
$ | 48.05 | $ | 47.72 | 1 |
(1)
|
Production represents production volumes NAR adjusted for inventory changes. NGL volumes are converted to BOE on a one-to-one basis with oil. Gas volumes are converted to BOE at the rate of 6 Mcf of gas per bbl of oil, based upon the approximate relative energy content of gas and oil, which rate is not necessarily indicative of the relationship of oil and gas prices.
|
Three Months Ended March 31,
|
||||||||
(Millions of U.S. Dollars)
|
2012
|
2011
|
||||||
Drilling and completion
|
$ | 10.5 | $ | 30.4 | ||||
Facilities and equipment
|
1.8 | 5.1 | ||||||
G&G
|
7.1 | 0.9 | ||||||
Other
|
0.9 | 5.9 | ||||||
|
$ | 20.3 | $ | 42.3 |
·
|
Costayaco Field, Chaza Block (100% working interest and operator)
|
·
|
Moqueta Field, Chaza Block (100% working interest and operator)
|
·
|
Verdeyaco Field, Guayuyaco Block (70% working interest and operator)
|
·
|
Azar Block (40% working interest and operator)
|
·
|
Together with our partner, we are evaluating options for testing additional reservoir intervals, potentially drilling an appraisal well and implementing an early production program on the Ramiriqui-1 exploration well on the Llanos -22 Block. We are awaiting approval from the ANH of the transfer of our 45% working interest in this Block.
|
·
|
On the Azar Block, a drilling rig was mobilized to the La Vega Este-1 wellsite.
The La Vega Este-1 well is expected to spud in the second quarter of 2012.
|
·
|
We expect to drill the Bordon-1 oil exploration well on the Garibay Block and the Verdeyaco-1 oil exploration well on the Guayuyaco Block in the second half of 2012.
|
Three Months Ended March 31,
|
||||||||||||
2012
|
2011
|
% Change
|
||||||||||
(Thousands of U.S. Dollars)
|
|
|
|
|||||||||
Oil and natural gas sales
|
$ | 15,369 | $ | 4,992 | 208 | |||||||
Interest income
|
47 | - | - | |||||||||
15,416 | 4,992 | 209 | ||||||||||
Operating expenses
|
7,346 | 3,547 | 107 | |||||||||
DD&A expenses
|
5,925 | 1,147 | 417 | |||||||||
G&A expenses
|
2,251 | 918 | 145 | |||||||||
Foreign exchange loss (gain)
|
371 | (190 | ) | 295 | ||||||||
15,893 | 5,422 | 193 | ||||||||||
Segment loss before income taxes
|
$ | (477 | ) | $ | (430 | ) | 11 | |||||
Production
|
||||||||||||
Oil and NGL's, bbl
|
199,300 | 89,838 | 122 | |||||||||
Natural gas, Mcf
|
363,473 | 39,060 | 831 | |||||||||
Total production, BOE (1)
|
259,879 | 96,348 | 170 | |||||||||
Average Prices
|
||||||||||||
Oil and NGL's, per bbl
|
$ | 70.87 | $ | 54.54 | 30 | |||||||
Natural gas, per Mcf
|
$ | 3.42 | $ | 2.37 | 44 | |||||||
Segmented Results of Operations (per BOE)
|
||||||||||||
Oil and natural gas sales
|
$ | 59.14 | $ | 51.81 | 14 | |||||||
Interest income
|
0.18 | - | - | |||||||||
59.32 | 51.81 | 14 | ||||||||||
Operating expenses
|
28.27 | 36.81 | (23 | ) | ||||||||
DD&A expenses
|
22.80 | 11.90 | 92 | |||||||||
G&A expenses
|
8.66 | 9.53 | (9 | ) | ||||||||
Foreign exchange loss (gain)
|
1.43 | (1.97 | ) | 173 | ||||||||
61.16 | 56.27 | 9 | ||||||||||
Segment loss before income taxes
|
$ | (1.84 | ) | $ | (4.46 | ) | (59 | ) |
(1)
|
Production represents production volumes NAR adjusted for inventory changes. NGL volumes are converted to BOE on a one-to-one basis with oil. Gas volumes are converted to BOE at the rate of 6 Mcf of gas per bbl of oil, based upon the approximate relative energy content of gas and oil, which rate is not necessarily indicative of the relationship of oil and gas prices.
|
·
|
Surubi Block (85% working interest and operator)
|
·
|
Puesto Morales Block (100% working interest and operator)
|
·
|
Rinconada Sur Block (100% working interest and operator)
|
·
|
Rinconada Norte Block (35% non-operated working interest)
|
Three Months Ended March 31,
|
||||||||||||
2012
|
2011
|
% Change
|
||||||||||
(Thousands of U.S. Dollars)
|
|
|||||||||||
Interest income
|
$ | 15 | $ | - | - | |||||||
Operating expenses
|
$ | 81 | $ | 64 | 26 | |||||||
DD&A expenses
|
115 | 31,933 | - | |||||||||
G&A expenses
|
616 | 565 | 9 | |||||||||
Foreign exchange (gain) loss
|
(70 | ) | 63 | (212 | ) | |||||||
742 | 32,625 | (98 | ) | |||||||||
Segment loss before income taxes
|
$ | (727 | ) | $ | (32,625 | ) | (98 | ) |
·
|
Block 95 (60% working interest and operator)
|
·
|
Blocks 107 and 133 (100% working interest and operator)
|
·
|
Blocks 123 and 129 (20% non-operated working interest)
|
Three Months Ended March 31,
|
||||||||||||
2012
|
2011
|
% Change
|
||||||||||
(Thousands of U.S. Dollars)
|
||||||||||||
Oil and natural gas sales
|
$ | 1,246 | $ | - | - | |||||||
Interest income
|
437 | 136 | 222 | |||||||||
1,683 | 136 | - | ||||||||||
Operating expenses
|
585 | - | - | |||||||||
DD&A expenses
|
22,041 | 241 | - | |||||||||
G&A expenses
|
6,434 | 8,842 | (27 | ) | ||||||||
Financial instruments gain
|
- | (230 | ) | - | ||||||||
Gain on acquisition
|
- | (24,300 | ) | - | ||||||||
Foreign exchange loss
|
717 | 5 | - | |||||||||
29,776 | (15,442 | ) | (293 | ) | ||||||||
Segment (loss) income before income taxes
|
$ | (28,093 | ) | $ | 15,578 | (280 | ) |
·
|
Blocks 129, 142, 155 and 224 (70% working interest and operator)
|
|
·
|
BM-CAL-7 Block, Camamu Basin
(10% non-operated working interest)
|
|
·
|
BM-CAL-10 Block, Camamu Basin
|
|
·
|
The 3-GTE-03D-BA and 3-GTE-4DPA-BA appraisal wells on Block 155 are expected to be tested and on production in mid-2012. Additionally, we are preparing the necessary ANP documents for the declaration of commerciality and the development plan for the field.
|
|
·
|
Also on Block 155, we expect to commence drilling the 1-GTE-5-BA oil exploration well in the second half of 2012.
|
|
·
|
On Block 142, drilling of the first horizontal sidetrack well, planned to be drilled from the 1-GTE-01-BA pilot hole, is expected to commence in mid-2012, subject to rig availability. This will be the first of three horizontal sidetrack wells that we expect to drill to test the productivity of the light oil sandstone reservoir targets in the Recôncavo Basin. Completion of the 1-GTE-01-BA well is pending the results of the horizontal leg drilling.
|
|
·
|
Additionally, we expect to drill the 1-GTE-6-BA oil exploration well from the 1-GTE-02-BA well bore on Block 129. We anticipate the horizontal sidetrack operations will start in the fourth quarter of 2012, with completion pending the results of the horizontal leg.
Completion of the 1-GTE-02-BA well is pending the results of the horizontal leg drilling.
|
|
·
|
Planned facilities work includes additional tankage, pipelines and gas facilities on Block 155.
|
|
·
|
On January 20, 2012, we entered into a purchase and sale agreement to acquire the remaining 30% participating interest in Blocks 129, 142, 155 and 224 from our partner. The completion of the purchase is subject to ANP approval.
|
As at March 31, 2012
|
||||||||||||||||||||
Payments Due in Period
|
||||||||||||||||||||
Total
|
Less than 1
Year
|
1 to 3 years
|
3 to 5 years
|
More than 5
years
|
||||||||||||||||
(Thousands of U.S. Dollars)
|
|
|
|
|
|
|||||||||||||||
Oil transportation services
|
$ | 36,922 | $ | 13,072 | $ | 7,100 | $ | 7,100 | $ | 9,650 | ||||||||||
Drilling and geological and geophysical
|
58,336 | 47,086 | 11,250 | - | - | |||||||||||||||
Completions
|
24,821 | 19,201 | 5,620 | - | - | |||||||||||||||
Facility construction
|
41,389 | 24,557 | 16,832 | - | - | |||||||||||||||
Operating leases
|
7,661 | 3,085 | 3,142 | 1,434 | - | |||||||||||||||
Software and telecommunication
|
4,790 | 3,811 | 979 | - | - | |||||||||||||||
Consulting
|
1,989 | 1,989 | - | - | - | |||||||||||||||
Total
|
$ | 175,908 | 112,801 | 44,923 | 8,534 | 9,650 |
●
|
all bilateral aid, except anti-narcotics and humanitarian aid, would be suspended;
|
●
|
the Export-Import Bank of the United States and the Overseas Private Investment Corporation would not approve financing for new projects in Colombia;
|
●
|
United States representatives at multilateral lending institutions would be required to vote against all loan requests from Colombia, although such votes would not constitute vetoes; and
|
●
|
the President of the United States and Congress would retain the right to apply future trade sanctions.
|
●
|
expand our systems effectively or efficiently or in a timely manner;
|
●
|
allocate our human resources optimally;
|
●
|
identify and hire qualified employees or retain valued employees; or
|
●
|
incorporate effectively the components of any business that we may acquire in our effort to achieve growth.
|
●
|
dilution caused by our issuance of additional shares of common stock and other forms of equity securities, which we expect to make in connection with acquisitions of other companies or assets;
|
●
|
announcements of new acquisitions, reserve discoveries or other business initiatives by our competitors;
|
●
|
fluctuations in revenue from our oil and natural gas business;
|
●
|
changes in the market and/or WTI or Brent price for oil and natural gas commodities and/or in the capital markets generally;
|
●
|
changes in the demand for oil and natural gas, including changes resulting from the introduction or expansion of alternative fuels;
|
●
|
changes in the social, political and/or legal climate in the regions in which we will operate;
|
●
|
changes in the valuation of similarly situated companies, both in our industry and in other industries;
|
●
|
changes in analysts’ estimates affecting us, our competitors and/or our industry;
|
●
|
changes in the accounting methods used in or otherwise affecting our industry;
|
●
|
announcements of technological innovations or new products available to the oil and natural gas industry;
|
●
|
announcements by relevant governments pertaining to incentives for alternative energy development programs;
|
●
|
fluctuations in interest rates, exchange rates and the availability of capital in the capital markets;
|
●
|
significant sales of our common stock, including sales by future investors in future offerings we expect to make to raise additional capital.
|
●
|
quarterly variations in our revenues and operating expenses; and
|
●
|
additions and departures of key personnel.
|
Date: May 7, 2012
|
/s/ Dana Coffield
|
|
By: Dana Coffield
|
Chief Executive Officer and
President
|
|
(Principal Executive Officer)
|
Date: May 7, 2012
|
/s/ James Rozon
|
|
By: James Rozon
Chief Financial Officer
|
(Principal Financial and Accounting
Officer)
|
No.
|
|
Description
|
|
Reference
|
|
|
|
|
|
2.1
|
|
Arrangement Agreement, dated as of July 28, 2008, by and among Gran Tierra Energy Inc., Solana Resources Limited and Gran Tierra Exchangeco Inc.
|
|
Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K (SEC File No. 001-34018), filed with the SEC on August 1, 2008.
|
|
|
|
|
|
2.2
|
|
Amendment No. 2 to Arrangement Agreement, which supersedes Amendment No. 1 thereto and includes the Plan of Arrangement, including appendices
|
|
Incorporated by reference to Exhibit 2.2 to the Registration Statement on Form S-3 (SEC File No. 333-153376), filed with the SEC on October 10, 2008.
|
2.3
|
|
Arrangement Agreement, dated January 17, 2011, by and between Gran Tierra Energy Inc. and Petrolifera Petroleum Limited. #
|
|
Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K, filed with the SEC on January 21, 2011 (SEC File No. 001-34018).
|
|
|
|
|
|
3.1
|
|
Amended and Restated Articles of Incorporation.
|
|
Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q/A (SEC File No. 001-34018), filed with the SEC on January 6, 2010.
|
|
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of Gran Tierra Energy Inc.
|
|
Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on September 22, 2008 (SEC File No. 000-52594).
|
|
|
|
|
|
4.1
|
|
Reference is made to Exhibits 3.1 to 3.2.
|
|
|
|
|
|
|
|
4.2
|
|
Form of Warrant issued to institutional and retail investors in connection with the private offering in June 2006.
|
|
Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on June 21, 2006 (SEC File No. 333-111656).
|
|
|
|
|
|
4.3
|
|
Details of the Goldstrike Special Voting Share.
|
|
Incorporated by reference to Exhibit 10.14 to the Annual Report on Form 10-KSB/A for the period ended December 31, 2005 and filed with the SEC on April 21, 2006 (SEC File No. 333-111656).
|
|
|
|
|
|
4.4
|
|
Goldstrike Exchangeable Share Provisions.
|
|
Incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-KSB/A for the period ended December 31, 2005 and filed with the SEC on April 21, 2006 (SEC File No. 333-111656).
|
|
|
|
|
|
4.5
|
|
Provisions Attaching to the GTE–Solana Exchangeable Shares.
|
|
Incorporated by reference to Annex E to the Proxy Statement on Schedule 14A filed with the SEC on October 14, 2008 (SEC File No. 001-34018).
|
|
|
|
|
|
4.6
|
|
Supplemental Warrant Indenture, dated as of March 18, 2011, among Gran Tierra Energy Inc., Petrolifera Petroleum Limited, and Computershare Trust Company of Canada.
|
|
Incorporated by reference to Exhibit 4.6 to the Quarterly Report on Form 10-Q filed with the SEC on May 10, 2011 (SEC File No. 001-34018).
|
|
Amendment No. 4 dated June 13, 2011 to the Colombian Participation Agreement dated June 22, 2006, between Gran Tierra Colombia Ltd and Crosby Capital, LLC
|
Filed herewith.
|
||
|
Amendment No. 5 dated February 10, 2011 to the Colombian Participation Agreement dated June 22, 2006, between Gran Tierra Colombia Ltd and Crosby Capital, LLC
|
Filed herewith.
|
||
10.3
|
Amendment dated January 30, 2012 to contract, dated July 27, 2011, between Gran Tierra Colombia Ltd and Ecopetrol S.A., for the Purchase and Sale of Crude Oil from the Chaza, Santana and Guayuyaco Blocks.
|
Incorporated by reference to Exhibit 10.58 to the Annual Report on Form 10-K filed with the SEC on February 27, 2012 (SEC File No. 001-34018).
|
||
10.4
|
Amendment dated January 30, 2012 to contract, dated July 27, 2011, between Solana Petroleum Exploration Colombia Ltd. and Ecopetrol S.A., for the
Purchase and Sale of Crude Oil from the Chaza, Santana and Guayuyaco Blocks.
|
Incorporated by reference to Exhibit 10.59 to the Annual Report on Form 10-K filed with the SEC on February 27, 2012 (SEC File No. 001-34018).
|
||
Agreement between Gran Tierra Colombia Ltd and Ecopetrol S.A., dated January 30, 2012 with respect to the transportation of crude oil from the Chaza Block
|
Filed herewith.
|
|||
|
Agreement between Solana Petroleum Exploration Colombia Ltd. and Ecopetrol S.A., dated January 30, 2012 with respect to the transportation of crude oil from the Chaza Block
|
Filed herewith.
|
||
|
Cash Compensation Arrangements with Executive Officers
|
Filed herewith.
|
||
|
Fourth Amendment to Credit Agreement, dated as of February 14, 2012, among Solana Resources Limited, Gran Tierra Energy Inc., BNP Paribas and Other Lenders
|
Filed herewith.
|
||
|
Amendment No. 6 dated March 1, 2012 to the Colombian Participation Agreement dated June 22, 2006, between Gran Tierra Colombia Ltd and Crosby Capital, LLC
|
Filed herewith.
|
Amendment to Employment Agreement dated May 2, 2012 between Gran Tierra Energy Inc. and Martin Eden
|
Filed herewith.
|
|||
|
Amendment to Employment Agreement dated May 2, 2012 between Gran Tierra Energy Inc. and David Hardy
|
|
Filed herewith.
|
|
Executive Employment Agreement dated May 2, 2012 between Gran Tierra Energy Inc. and James Rozon
|
Filed herewith.
|
|||
Certification of Principal Executive Officer
|
Filed herewith.
|
|||
Certification of Principal Financial Officer
|
Filed herewith.
|
|||
Section 1350 Certifications.
|
Filed herewith.
|
|
1.
|
Section 6.2.1(b) of the Agreement shall be deleted in its entirety and replaced with the following:
|
|
(b)
|
Term
: The Initial Letter of Credit shall remain outstanding for a period commencing on the Closing and ending March 1, 2012. Such period is referred to herein as the “
Initial Term
.”
|
|
2.
|
References to the “Agreement” in the Original Participation Agreement shall be deemed to include the Original Participation Agreement, as amended by Amendment No. 1, Amendment No. 2, Amendment No. 3, and this Amendment. Except as expressly modified or otherwise as set forth therein or herein, the terms and conditions of the Original Participation Agreement remain in full force and effect.
|
|
3.
|
Each Party shall be responsible for and pay all of its own costs and expenses incurred at any time in connection with this amendment.
|
|
4.
|
This Amendment may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart.
|
|
5.
|
A facsimile, telecopy or other reproduction of this Amendment may be executed by one or more parties to this Amendment, and an executed copy of this Amendment may be delivered by one or more parties to this Amendment by facsimile or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution an delivery shall be considered valid, binding and effective for all purposes. At the request of any party to this Amendment, all parties to this Amendment agree to execute an original of this Amendment as well as any facsimile, telecopy or other reproduction of this Amendment.
|
|
6.
|
By their respective signatures below, each Party represents and warrants to the others, that it has full power and authority to execute and deliver this Amendment, that all requisite internal approvals, including approval by the board of directors or other managerial authority has been properly obtained, and that this Amendment shall constitute the legal, valid and binding obligation of such party enforceable in accordance with its terms, except to the extent such enforcement may be subject to bankruptcy, insolvency, reorganization or other similar laws affecting enforcement of creditors’ rights generally.
|
Gran Tierra Energy Colombia, Ltd.
|
||
By: | Argosy Energy, LLC (f/k/a/ Argosy | |
Energy Corp.), its General Partner | ||
|
By:
|
/s/ Julian Garcia |
Name: Julian Garcia | ||
Title: Manager | ||
Gran Tierra Energy Inc. | ||
By: | s/ Martin Eden | |
Name: Martin Eden | ||
Title: Chief Financial Officer | ||
Crosby Capital, LLC
|
||
By: | /s/ Jay Allen Chafee | |
Name: Jay Allen Chafee | ||
Title: President |
1.
|
Section 6.2.1(b) of the Agreement shall be deleted in its entirety and replaced with the following:
|
(b)
|
Term
: The Initial Letter of Credit shall remain outstanding for a period commencing on the Closing and ending June 1, 2012. Such period is referred to herein as the “
Initial Term
.”
|
2.
|
References to the “Agreement” in the Original Participation Agreement shall be deemed to include the Original Participation Agreement, as amended by Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4 and this Amendment. Except as expressly modified or otherwise as set forth therein or herein, the terms and conditions of the Original Participation Agreement remain in full force and effect.
|
3.
|
Each Party shall be responsible for and pay all of its own costs and expenses incurred at any time in connection with this amendment.
|
4.
|
This Amendment may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart.
|
5.
|
A facsimile, telecopy or other reproduction of this Amendment may be executed by one or more parties to this Amendment, and an executed copy of this Amendment may be delivered by one or more parties to this Amendment by facsimile or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution an delivery shall be considered valid, binding and effective for all purposes. At the request of any party to this Amendment, all parties to this Amendment agree to execute an original of this Amendment as well as any facsimile, telecopy or other reproduction of this Amendment.
|
6.
|
By their respective signatures below, each Party represents and warrants to the others, that it has full power and authority to execute and deliver this Amendment, that all requisite internal approvals, including approval by the board of directors or other managerial authority has been properly obtained, and that this Amendment shall constitute the legal, valid and binding obligation of such party enforceable in accordance with its terms, except to the extent such enforcement may be subject to bankruptcy, insolvency, reorganization or other similar laws affecting enforcement of creditors’ rights generally.
|
Gran Tierra Energy Colombia, Ltd.
|
||
By: | Argosy Energy, LLC (f/k/a/ Argosy | |
Energy Corp.), its General Partner | ||
|
By:
|
/s/ Julio Moreira |
Name: Julio Moreira | ||
Title: Manager | ||
Gran Tierra Energy Inc. | ||
By: | /s/ David Hardy | |
Name: David Hardy | ||
Title: General Counsel | ||
Crosby Capital, LLC
|
||
By: | /s/ Jay Allen Chafee | |
Name: Jay Allen Chafee | ||
Title: President |
Date
|
Bogota D.C. January 30, 2012
|
Contract No.
|
VIT-001-2012
|
SENDER
|
GRAN TIERRA ENERGY COLOMBIA LTD
|
|
TAX ID
|
860.516.431-7
|
SHIPPER
|
ECOPETROL S.A.
|
|
TAX ID
|
899.999.068-1
|
TYPE OF CRUDE
|
OWN PRODUCTION
|
x
|
PROPERTY
|
Transportation Service of liquid hydrocarbons through the “Trasandino” Pipeline(OTA) and Mansoyá-Orito (OMO) pipeline.
|
Estimated Value of the Contract
|
Six millions seven hundred forty five thousand dollars of The United States of America
(USD$6.745.000).
|
Rate “Mansoyá-Orito” Pipeline (OMO)
|
Cero point five one nine two dollars of The Untied States of America
(USD$0,5192) per Barrel
|
Rate “Trasandino” Pipeline (OTA)
|
Three dollars eleven forty three cents of dollars of The Untied States of America
(USD$3,1143) per Barrel.
|
PRODUCT
|
Daily Average
(Barrels/calendar day)
|
Monthly average
(Barrels/month)
|
Crude
|
10.000
|
300.000
|
TERM OF EXECUTION
|
From January 30, 2012 until July 29, 2012
|
Point
#
|
Type of Point
|
Name of Point
|
Distance
(km)
|
1
|
Point of Entrance
|
Entrance bridle to the srapers tramp in the PK 35+400 of OMO
|
377,3
|
2
|
Point of Exit
|
Exit bridle to the main tanks of Tumaco Plant.
|
Characteristics
|
Lower Limit
|
Upper Limit
|
Temperature
|
120°F
|
|
Viscosity
|
300 cSt 30ºC.
|
|
Water and sediments (BSW)
|
0,5 % in volume
|
|
Salt
|
20 PTB
|
|
Steam pressure
|
Eleven (11) psi at 100°F
|
|
Gravity in API degrees
|
18 degrees
|
50 degrees
|
TYPE OF BOND
|
AMOUNT
|
Performance Insurance Policy
|
Four thousand forty seven millions of Colombian pesos
($4.047.000.000)
|
BY THE SENDER:
|
BY ECOPETROL S.A.:
|
||
Signature
|
“/s/ Duncan Nightingale”
|
Signature
|
“/s/ Rafael Espinosa Rozo”
|
Name:
|
DUNCAN NIGHTINGALE
|
Name:
|
RAFAEL ESPINOSA ROZO
|
Title:
|
Legal Representative
Pasaporte No. BA386341
|
Title:
|
Pipelines Manager
C.C. No. 79.432.773 de Bogotá D.C.
|
Signature
|
“/s/ Hugo Rodriguez”
|
||
Name:
|
HUGO RODRIGUEZ
|
||
Title:
|
Legal Representative
C.C. No. 3.093.980
|
ADDRESS
|
5.1 |
Carrera 7 No. 37 – 69 Piso 9 Edificio Teusacá
|
TELEPHONE | 5.2 | 2343491 |
FAX | 5.3 | 2343532 |
CITY | 5.4 | Bogotá D.C. |
ADDRESS
|
5.5 |
Calle 113 No. 7 – 80 Piso 17
|
TELEPHONE | 5.6 | 6585757 |
FAX | 5.7 | 2139327 |
CITY | 5.8 | Bogotá D.C. |
|
1.
|
ECOPETROL is the owner of the pipelines of private use indicated in the Specific Conditions (hereinafter, the “Pipelines”).
|
|
2.
|
Currently the Pipelines have Available Capacity for the shipment of crudes from third parties.
|
|
3.
|
The SENDER has crude oils of its own/production that wishes to ship through the Pipelines under the conditions established in this Contract and its annexes, with the quality specifications set forth by ECOPETROL for its shipment through the Pipelines.
|
|
4.
|
The Parties have agreed to enter into this Contract under the “Spot” shipping contract modality, by virtue of which, the SENDER shall be obliged to pay the shipping fee applicable for the barrels effectively shipped through the Pipelines during the Month of Operation and subject to the existence of Available Capacity.
|
|
5.
|
The SENDER knows and accepts in all its terms the Manual of the Shipper of the Pipelines, which is an integral part of the Contract hereof as Annex 1.
|
|
1.1
|
ECOPETROL is obliged within the terms and conditions set out in this Contract, its annexes and in the applicable regulations, to ship through the Pipeline, from the Entrance Points agreed and detailed in the Specific Conditions to the Exit Points agreed and detailed in Specific Conditions, crudes owned/produced by the SENDER and delivered in the Entrance Points pursuant to the instructions and procedures set out by ECOPETROL (hereinafter, the “Service”).
|
|
1.2
|
By virtue of this Contract and as indicated in the Specific Conditions, the SENDER shall have a limited capacity for shipment by the Pipeline of crudes of its own/production, subject to the existence of Available Capacity during the month of operation of the Service (hereinafter, the “Contracted Capacity”).
|
|
1.3
|
The scope of the obligations of ECOPETROL is limited to the reception, custody, shipment, decanting, and indispensable storage for the transportation and shipment of Crude to the SENDER.
|
|
1.4
|
The Contract hereof does not include the provision of the unloading service in unloading areas, the treatment of crudes, the storage in export terminals, or any terminal services. It is the responsibility of the SENDER to execute or contract these services whenever it may be necessary. The SENDER shall wave and hold ECOPETROL harmless for any damage or prejudice suffered by ECOPETROL as a result of failing to receive the Crude in the Exit Point, either by lack of the services before mentioned or by failing to provide the appropriate facilities for such purpose.
|
|
7.1
|
The SENDER undertakes the obligation to pay irrevocably and unconditionally the Service for the Contracted Capacity, twenty (20) calendar days at the latest, after ECOPETROL files in the offices of the SENDER the invoice for the provision of the Service.
|
|
7.2
|
ECOPETROL shall deliver to the SENDER on the twentieth (20) day of each month at the latest a preliminary account (invoice) with the amount that the SENDER must pay (corresponding to the current month) based on the Nomination made by the SENDER for the current month.
|
|
7.3
|
Considering that the charging for the Service is made on the Nomination of the current month, ECOPETROL in order to make the corresponding adjustment to the nominated volume and the volume of Crude actually shipped, shall generate the corresponding debit and credit vouchers and shall deliver said debit or credit vouchers together with the invoice(s) of the nominated month to be charged. The due date of the debit and credit vouchers shall be the same as for the invoice (with the nominated volume) of the current month in order to facilitate the SENDER the making of only one net payment for both items.
|
|
7.4
|
Payments shall be made in Colombian pesos using the arithmetic average of the representative market exchange rate certified by the Superintendence of Finance or the entity replacing it, of the days of the month corresponding to the Service invoiced.
|
|
7.5
|
The SENDER shall make the payment by means of making a deposit in any of the bank accounts as indicated by ECOPETROL. In case ECOPETROL requires any changes in the bank account, it shall be informed in writing to the SENDER.
|
|
7.6
|
The SENDER is obliged to receive the invoice once ECOPETROL has filed it. Any objections to the invoicing will not interrupt the term for the payment respect to the sums that are not objected by the SENDER, pursuant to the term established in this clause. ECOPETROL shall issue the note credit or equivalent document respect to the sums objected by the SENDER, in order to rectify the inaccuracy.
|
|
7.7
|
ECOPETROL, in order to facilitate and expedite the verification of the invoices by the SENDER shall deliver via e-mail the same day of its preparation and in PDF format, to the account of institutional e-mail registered by the SENDER, a copy of the invoices and corresponding debit and credit vouchers.
|
|
7.8
|
The SENDER shall pay late interests on any unpaid amounts pursuant to the provisions set out by ECOPETROL in the Guidelines for Administration of Service Receivables ECP-UTE-G-008 or a document that modifies or supersedes it, which is an integral part of the Contract hereto as Annex 2.
|
|
7.9
|
The shipment tax shall be invoiced in Colombian pesos upon obtaining the corresponding liquidation from the Ministry of Mines and Energy and shall be paid to ECOPETROL by the SENDER, within the fifteen (15) calendar days after ECOPETROL files in the offices of the SENDER the corresponding bills or invoices.
|
7.10
|
The amounts deposited by the SENDER in any of the bank accounts of ECOPETROL must come from the accounts owned by the SENDER, who by means of written communication before the subscription of the Contract will certify the origin of funds. This in accordance with the Policy for the Prevention and Control of Asset Laundering of ECOPETROL.
|
|
a)
|
Receive in the Entrance Point agreed in the Pipeline, the Crude owned by the SENDER up to the volume corresponding to the Contracted Capacity, subject to the Available Capacity of the Pipeline in the Month of Operation in which the Service is to be provided.
|
|
b)
|
Maintain in custody the Crude delivered from the Point of Entrance until the time of delivery to the SENDER in the Exit Point. Notwithstanding the foregoing, in the event in which the SENDER does not receive the Crude in the Point of Exit pursuant to the agreement, the responsibility by the ECOPETROL to maintain the Crude in custody shall cease.
|
|
c)
|
Shipping and decanting through the Pipeline the Crude delivered by the SENDER from the Point of Entrance until the Exit Point.
|
|
d)
|
Store the Crude from its reception in the Point of Entrance until delivered to the SENDER in the Point of Exit, exclusively to facilitate its shipment under the Contract hereof, not including the storage for export or the segregate storage of Crude.
|
|
e)
|
Deliver the Crudes shipped to the SENDER or whoever is designated as receiver of the same in the Point of Exit, in accordance with the instructions received by the SENDER and with the conditions of the Manual of the Shipper.
|
|
f)
|
ECOPETROL shall not be obliged to receive Crude: (a) when the same fails to fulfill the Specifications of Quality agreed in the Contract hereof; (b) when the SENDER does not have an accepted nomination in the Shipment Schedule of the Pipeline, or (c) when there are not valid agreements of the SENDER that allow the delivery of Crude in the Point of Exit.
|
|
g)
|
Execute all other obligations derived from the nature of the Contract.
|
|
a)
|
Undertake the nomination of the Crudes to be shipped, pursuant to the procedure established in the Manual of the Shipper.
|
|
b)
|
Deliver at the Point of Entrance the Crudes of its own/production included in the Shipment Schedule as a result of the nomination process.
|
|
c)
|
Receive in the Point of Exit the Crudes transported as established in the Manual of the Shipper and the procedures set forth by ECOPETROL, or if a receiver different than the SENDER has been designated, this shall take al necessary measures so that the Crude is received in accordance with the stipulations in the Manual of the Shipper and the procedures set out by ECOPETROL, the SENDER is any case responsible for the reception of the Crude. In case the Crude is not received at the Point of Exit, the provisions established in the Manual of the Shipper shall be applied.
|
|
d)
|
Enter into the contracts with other shippers or terminal operators required to ensure the delivery of crudes at the Point of Exit without affecting the operation of the Pipeline.
|
|
e)
|
Make the Fee payment and all other items as they may apply in the terms and conditions established in the Contract hereof.
|
|
f)
|
Execute the bond in favor of ECOPETROL.
|
|
g)
|
Make the payment of the shipping tax under the conditions set out in this Contract and the law.
|
|
h)
|
Execute all other obligations derived from the nature of the Contract.
|
|
a)
|
In addition to the provisions in the Manual of the Shipper, ECOPETROL shall not be responsible for any faults in the Service, or the loses, damage or deterioration the Crude may suffer, if the fault in the Service, the loss, damage or deterioration of the Crude are due to (i) events of force majeure or acts of nature, (ii) Acts from third parties, (iii) vice inherent to the Crude, or (iv) fault attributable to the Sender (hereinafter, the “Excusable Events”).
|
|
b)
|
ECOPETROL shall only be responsible for the faults in the Service or loses, damage or deterioration the Crude may suffer to the extent it does not demonstrate that (i) no Excusable Event has occurred, and also, (ii) ECOPETROL failed to adopt the reasonable measures any shipper would have taken according to the requirements of operation of a pipeline with similar characteristics to the Pipeline, to avoid the damage or its aggravation.
|
|
c)
|
In all other events, different than those in connection with the provision of the Service, ECOPETROL shall be liable to the extent in incurs in gross negligence.
|
|
d)
|
Save the event of gross negligence or willful misconduct, pursuant to the provisions in this numeral 11.2, the responsibility of ECOPETROL under the Contract hereof under no circumstance shall exceed seventy five per cent (75%) of the value of the Crude lost or damaged by causes attributable to ECOPETROL.
|
|
e)
|
Save the event of gross negligence or willful misconduct, if any claims arise by the SENDER such as the loss of profit, this shall not exceed twenty five percent (25%) of the value that ECOPETROL is obliged to indemnify the SENDER under this numeral 11.2(d) of the Contract hereof.
|
|
a)
|
The SENDER shall be liable for any damage caused to ECOPETROL for the default of its obligations under the Contract hereof and shall be responsible for any damage derived from or as a consequence of the actions or omissions of the SENDER, its workers, subordinates, contractors and subcontractors, except in cases of (i) gross negligence or willful misconduct by ECOPETROL, or (ii) a force majeure or unforeseen circumstances.
|
|
b)
|
The SENDER shall not be waved from its responsibility to pay the Fee agreed in this Contract, save the Service is not provided by causes exclusively attributable to ECOPETROL as indicated in numeral 11.2 b).
|
|
a)
|
ECOPETROL shall notify the SENDER within twenty four hours (24) following the moment of occurrence, making the commitment to submit all details within the following five (5) business days.
|
|
b)
|
ECOPETROL shall carry out all reasonable procedures as required to resume as soon as possible the performance of the obligations of the Contract. Likewise, it shall make efforts to minimize or mitigate any delay or additional costs that may be generated.
|
|
a)
|
Serious default of the obligations of the SENDER without solving them within the Grace Period, when it may apply.
|
|
b)
|
The dissolution of the SENDER as a legal person.
|
|
c)
|
The unauthorized assignment of the Contract by the SENDER.
|
|
d)
|
Due to changes in regulations making more costly the fulfillment of obligations undertaken by ECOPETROL.
|
|
e)
|
As a consequence of any of the following causes: (i) fraud of the SENDER; or (ii) the SENDER incurs in acts or conducts that may endanger the operational and/or technical stability of the Pipelines.
|
|
f)
|
The procedure to be followed by ECOPETROL to terminate the Contract is: notify in writing with at least thirty (30) calendar days in advance to the SENDER its intention to terminate the Contract, indicating the causes for such decision and the effective date of termination. Upon fulfillment of this procedure the SENDER shall not: (i) request any justifications or extensions to the motives explained by ECOPETROL, or (ii) request or demand any kind of compensation or damages derived from the decision to terminate the Contract.
|
|
g)
|
The termination shall not release the Parties from its corresponding obligations and responsibilities attributable to periods before the date of termination of the Contract.
|
|
h)
|
The termination in advance of this Contract shall not release the SENDER from the obligations that survive the termination of the Contract, especially that related with the payment of the Fee pending of payment and the payment of the penal clause. In the event of termination in advance of the Contract, the SENDER shall have a sixty (60) day term following the issuance of the corresponding invoice by ECOPETROL to pay the amount of any overdue fees.
|
|
a)
|
The statement regarding the performance of the obligation undertaken by each of the Parties (or from ECOPETROL if the liquidation is unilateral) derived from the execution of the Contract; and
|
|
b)
|
Any agreements, settlements and transactions reached by the Parties to settle any differences that may have arisen and to obtain the good standing and release of any obligations.
|
|
a)
|
The assignee is a legal person duly organized and the duration of the same shall not be less that the term of the Contract and three (3) more years.
|
|
b)
|
The assignee has an adequate financial capacity to meet the obligations derived from the Contract assigned.
|
|
c)
|
The assignee has Crude of its own/production.
|
|
d)
|
The assignee provides and adequate and acceptable Bond payment to ECOPETROL for the fulfillment of the obligations derived from the Contract.
|
|
a)
|
When the disclosure of information is mandatory by law;
|
|
b)
|
When the disclosure of information is ordered by a competent authority;
|
|
c)
|
When the information in question is of public domain, without any action or omission from the Parties; or
|
|
d)
|
When the entity providing the information authorizes it, in each case, previously and in writing;
|
|
a)
|
Maintain conducts and appropriate controls to ensure an ethical conduct and in accordance with regulations in force.
|
|
b)
|
Refrain from making (directly or indirectly, or through employees, representatives, affiliates or contractors) payments, loans, gifts, gratifications, commissions, to employees, managers, administrators, contractors or suppliers of ECOPETROL, public officials, members of corporations of popular election or political parties, in order to induce such persons to conduct any action or make any decision or use their influence in order to contribute to obtain or retain businesses in connection with the Contract.
|
|
c)
|
Refrain from originating records or inaccurate information, or publish information that affects the image of the other Party when based on assumptions that have not been demonstrated.
|
|
d)
|
Avoid any situation which may generate a conflict of interest.
|
|
e)
|
Communicate mutually and reciprocally any deviation from the line of conduct indicated in this clause.
|
ANNEX 1
|
MANUAL OF THE SHIPPER OF THE ECOPETROL S A PIPELINE
|
ANNEX 2
|
GUIDELINES FOR THE ADMINISTRATION OF RECEIVABLE SERVICES OF ECOPETROL
|
ANNEX 3
|
GENERAL CLAUSES OF ECOPETROL FOR PERFORMANCE POLICIES
|
ANNEX 4
|
STAND-BY LETTER OF CREDIT FORM
|
|
a)
|
delivered personally; or
|
|
b)
|
transmitted by facsimile, electronic mail or any other means through which it may be proved its delivery and reception (with proved reception and confirmation by mail).
|
|
a)
|
On the reception date if delivered personally, or
|
|
b)
|
Twenty four (24) hours after the transmission date, if transmitted by facsimile, electronic mail or any other means through which its delivery and reception may be proved; provided however, confirmation is received within the following three (3) days; whatever occurs first.
|
CLAUSE 1. PURPOSE
|
3
|
CLAUSE 2 DEFINITIONS
|
3
|
CLAUSE 3 GENERAL DESCRIPTION OF THE PIPELINE
|
10
|
CLAUSE 4 OBLIGATIONS OF THE PARTIES
|
10
|
CLAUSE 5 FEES
|
13
|
CLAUSE 6 SPECIAL SERVICES
|
14
|
CLAUSE 7 ADJUSTMENT OF THE EFFECTIVE CAPACITY OF THE SYSTEM DUE TO VARIATIONS IN THE SPECIFICATIONS OF HYDROCARBONS
|
14
|
CLAUSE 8 PROJECTIONS, NOMINATION AND TRANSPORTATION SCHEDULE OF THE PIPELINE
|
15
|
CLAUSE 9 BALANCE IN EXCESS OR DEFECT
|
18
|
CLAUSE 10 PRIORITIES IN THE NOMINATION PROCESS
|
19
|
CLAUSE 11 REJECTION OF A TRANSPORTATION REQUEST
|
20
|
CLAUSE 12 QUALITY REQUIREMENTS
|
21
|
CLAUSE 13 DETERMINATION OF QUANTITIES AND QUALITY
|
22
|
CLAUSE 14 VOLUMETRIC COMPENSATION FOR QUALITY
|
25
|
CLAUSE 15 BULLETIN OF TRANSORTATION BY THE PIPELINE – BTO
|
26
|
CLAUSE 16 SPECIAL TRANSPORTATION CONDITIONS
|
28
|
CLAUSE 17 REGULATIONS FOR THE TRANSPORTATION OF SEGREGATED HYDROCARBON
|
29
|
CLAUSE 18 RISKS AND RESPONSIBILITY
|
29
|
CLAUSE 19 FILLING THE PIPELINE OR FILLING THE LINE
|
31
|
CLAUSE 20 HANDLING LOSSES IN THE PIPELINE
|
32
|
CLAUSE 21 CLAIMS
|
33
|
CLAUSE 22 SANCTIONS TO OPERATING AGENTS FOR NON-PERFORMANCE OF THE TRANSPORTATION SCHEDULE
|
34
|
CLAUSE 23 HYDROCARBON AFFECTED BY LITIGATION
|
35
|
CLAUSE 24 INVESTMENTS IN THE PIPELINE
|
35
|
CLAUSE 25 SOLE RISK PROPOSALS
|
36
|
CLAUSE 26 PROCEDURES FOR COORDINATION OF OPERATIONS, COMMUNICATIONS AND EMERGENCY ASSISTANCE
|
38
|
CLAUSE 27 SETTLEMENT OF CONTROVERSIES
|
39
|
CLAUSE 28 VALIDITY
|
39
|
CLAUSE 29 ADDITIONS AND MODIFICATION
|
39
|
CLAUSE 30 APPLICABLE LEGISLATION
|
39
|
ANNEX 1: MECHANISMS OF QUALITY COMPENSATION FOR THE MIXTURE OF CRUDE OIL
|
40
|
ANNEX 2: DEFINITION OF STANDARD BARRELS PER SYSTEM
|
49
|
ANNEX 3: DESCRIPTION OF THE SYSTEMS
|
50
|
ANNEX 4: MINIMUM SPECIFICATIONS OF QUALITY PER SYSTEM
|
51
|
1.1
|
The Pipeline is for private use considering its nature and in accordance to the provisions in the Colombian Code of Crude Oils.
|
1.2
|
The purpose of this Manual of the Transporter of the Pipeline (hereinafter the “Transporter’s Manual) is to establish the general conditions for the Transportation of Hydrocarbons of the Owners through the Pipeline.
|
1.3
|
Likewise, conditions for the access of Third Parties to the Pipeline are established in those events in which there is Available Capacity in the Pipeline.
|
TEST PARAMETER
|
VALUE OF THE
PARAMETER
|
TEST
STANDARD
|
Sediment and water or particles
|
Not to exceed 0.5% in volume
|
Sediments –ASTM D473
Water – Karl Fisher
|
API at 60 °F
|
Higher than 18 degrees API but less than 50 degrees API
|
D 1298
|
Viscosity @ temperature of reference
|
Not to exceed 300 cSt at 30 °C
|
ASTM D445 or D446
|
Vapor pressure
|
Not to exceed 11 lb/square inch
Reid Vapour Pressure
|
ASTM D323
|
Temperature of reception
|
Not to exceed 120 °F
|
|
Salt content
|
20 PTB
|
ASTM D 3230
|
Point of fluidity
|
Not higher than 12 °C
|
ASTM D 93
|
|
·
|
Stops/ starts of the Pipeline
|
|
·
|
Illegal extractions non-detected
|
|
·
|
Faults in the meter factors
|
|
·
|
Volumetric contractions
|
|
·
|
Leakages/passes in the valves
|
|
·
|
Evaporation
|
|
·
|
Escapes
|
|
·
|
Inherent uncertainties on the measurement systems and associated instrumentation
|
|
·
|
Inherent uncertainties of laboratory analysis associated to the calculation of volumes
|
|
·
|
Propagation of inherent uncertainties of the procedures set out at the international level for the calculation of volumes by static and dynamic measurement.
|
|
·
|
Handling loses inherent to the Pipeline
|
|
1.
|
LOSSES
|
|
2.
|
CRUDE OIL CONSUMPTION
|
|
3.
|
VOLUMETRIC COMPENSATION FOR QUALITY – CVC
|
|
3.1
|
When Crude Oils are delivered to the Pipeline of different quality and from different Senders, the result shall be a Crude Oil with different characteristics of quality and market value than the Crude Oil delivered to the Pipeline by each of the Senders. Due to different qualities of Crude Oil delivered to the Pipeline, some Senders shall withdraw Crude of higher value than the Oil delivered while others shall withdraw Crude Oil with less value than the Oil delivered to the Pipeline.
|
|
3.2
|
SAMPLING AND SYSTEM MEASUREMENT
|
|
3.3
|
CVC PROCEDURES
|
|
3.3.1
|
The Transporter shall administer the CVC process and the Senders may audit the process or request reviews thereto as long as the Transporter is timely informed and a working plan is coordinated between the parties.
|
|
3.3.2
|
The Transporter shall establish monthly the coefficients for adjustments of quality and sulfur pursuant to the criteria established herein.
|
|
3.3.3
|
The CVC shall be settled in kind.
|
|
3.3.4
|
The Transporter shall make monthly adjustments to the corresponding volume of Crude to each Sender, based on the coefficients of adjustment for quality.
|
|
(a)
|
Reduced if such Sender of the Pipeline delivers Crude of lower quality than the average quality of the mix,
|
|
(b)
|
Increased if said Sender of the Pipeline delivers Crude of ah higher quality than the average quality of the mix.
|
|
3.3.5
|
At the latest on the 15
th
day of the calendar month following the Operation, Senders shall report to the Transporter the export prices, the API gravity and the sulfur content of its Crude for the Month of Operation.
|
|
3.3.6
|
Each month of Operation the Transporter shall measure the volumes delivered by the Senders and shall determine the weighted average for the quality parameters of Crude Oils delivered.
|
|
3.3.7
|
The Transporter shall calculate the adjustments to the volume for each Sender and shall determine the Crude volume that corresponds. No adjustment in the volume as a consequence of the CVC shall affect the Transportation fee that a Sender shall Pay to the Transporter.
|
|
3.3.8
|
Senders acknowledge that adjustments to their Crude volumes to be withdrawn as a result of these principles and procedures of the CVC may affect the volume of Crude Oil for a withdrawal afterwards.
|
|
3.3.9
|
Senders are entitled to review the Transporter’s calculations regarding the adjustments by CVC and the due application of this procedure.
|
|
(a)
|
The appropriateness of the Crude Oil reference basket regarding their terms of quality.
|
|
(b)
|
The information on prices available to the public.
|
|
(c)
|
The calculations of the coefficients and the volumes adjusted.
|
3.3.10
|
A data base for the API gravity shall be developed and sulfur content for Crude delivered from reliable samples of laboratory of Crude Oil flows. The quality data of Crude Oil must comply with the following criteria:
|
|
3.4
|
METHODOLOGY FOR CRUDE OIL VALUATION
|
|
3.4.1
|
BASKET OF REFERENCE FOR CRUDE OIL
|
|
3.4.2
|
CALCULATION OF CRUDE OIL PRICES FOR THE BASKET IN THE COAST OF THE GULF
|
|
1.
|
FOB quotation
|
|
-
|
Transportation to the Coast of the Gulf of The United States of America is added using the appropriate vessel size.
|
|
-
|
Customs Tariffs, Oil pollution Liability Insurance, “Superfund” taxes are included and others as appropriate.
|
|
2.
|
CIF quotation
|
|
-
|
Customs Tariffs, Oil pollution Liability Insurance, “Superfund” taxes are included and others as appropriate.
|
|
3.
|
Crude Oil delivered by the Pipeline
|
|
-
|
Any Pipeline fee is added if necessary
|
|
-
|
“Superfund” is included and other fees/tariffs as appropriate.
|
|
3.4.3
|
LINEAR REGRESSION FOR PRICES, GRAVITY AND SULFUR
|
|
3.4.3
|
ADJSUTMENT OF VOLUMES FOR SENDERS (TABLE VI)
|
Degree
|
Origin
|
API, °
|
Sulfur%
|
Source for Pricing
|
BBL/MT
|
Arab Light
|
Saudi Arabia
|
33.2
|
1.9
|
Argus, Formula
|
7.34
|
Arab Medium
|
Saudi Arabia
|
30.5
|
2.4
|
Argus, Formula
|
7.22
|
Arab Heavy
|
Saudi Arabia
|
27.6
|
2.8
|
Argus, Formula
|
7.09
|
Castilla
|
Colombia
|
18.8
|
2.0
|
Platts
|
6.70
|
LLS
|
US Gulf Coast
|
36.2
|
0.3
|
Argus
|
7.47
|
Mars
|
US Gulf Coast
|
28.0
|
2.1
|
Argus
|
7.15
|
Maya
|
Mexico
|
21.1
|
3.5
|
Argus
|
6.80
|
Napo
|
Ecuador
|
18.0
|
2.3
|
Platts
|
6.66
|
East
|
Ecuador
|
24.0
|
1.2
|
Platts
|
6.93
|
Vasconia
|
Colombia
|
26.5
|
0.9
|
Platts
|
7.04
|
API
|
Sulfur
|
JUN-2010
|
JUL-2010
|
AUG-2010
|
Average of
3 previous
months (1)
|
|
Arab Light
|
33.2
|
1.9
|
77.60
|
76.26
|
76.29
|
76.72
|
Arab Medium
|
30.5
|
2.4
|
75.84
|
74.59
|
74.62
|
75.02
|
Arab Heavy
|
27.6
|
2.8
|
74.34
|
73.32
|
73.25
|
73.64
|
Castilla
|
18.8
|
2.0
|
69.84
|
69.20
|
69.20
|
69.41
|
LLS
|
36.2
|
0.3
|
78.94
|
78.84
|
79.79
|
79.19
|
Mars
|
28.9
|
2.1
|
74.63
|
74.18
|
74.35
|
74.39
|
Maya
|
21.1
|
3.5
|
66.27
|
67.47
|
68.65
|
67.46
|
Napo
|
18.0
|
2.3
|
69.56
|
69.02
|
69.08
|
69.22
|
East
|
24.0
|
1.2
|
72.12
|
71.93
|
72.15
|
72.07
|
Vasconia
|
26.5
|
0.9
|
74.93
|
75.89
|
75.29
|
75.37
|
(2) API, $/API-BBL Coefficient
|
0,495
|
(3) Sulfur, $%S-BBL
|
(1,191)
|
Bank of Quality Coefficients |
API Coefficient
|
(0.50)
|
Sulfur Coefficient
|
(1.19)
|
Sender
|
Volume
injected
by sender
MBBL/mo
|
API in
the
injection
point
|
Sulfur in
the
injection
point
|
Relative
value of
the crude
S$/BBL
|
Calculated
Price
$/BBL
|
Total
Volume
adjusted
by sender
MBBL/mo
|
Volume
to adjust
MBBL/mo
|
Sender A
|
900
|
31
|
0.5
|
14.75
|
77.97
|
935
|
36
|
Sender B
|
1,200
|
26
|
1.0
|
11.69
|
74.90
|
1,195
|
(2)
|
Sender C
|
600
|
20
|
2.0
|
7.53
|
70.74
|
566
|
(34)
|
Total
|
2,700
|
2,700
|
-
|
(1)
|
Relative value calculated for mix
|
11.79
|
(2)
|
Average price of exportation of mix, August 2012
|
75.00
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
1.
|
OBJECTIVE
|
||
2.
|
GLOSSARY
|
||
3.
|
GENERAL CONDITIONS
|
||
3.1
|
Commercial Principles for Credit and Receivables Management
|
||
3.2
|
Analysis of Credit Quality of the Client
|
||
3.3
|
Internal Rating by ECOPETROL
|
||
3.3.1
|
Guidelines for the Analysis of the Client
|
||
3.3.2
|
Modalities in which Payments can be Made
|
||
3.3.3
|
Clients with Acceptable Guarantee Created for Purchase
|
||
3.3.4
|
Clients of Leasing
|
||
3.4
|
Process for Approval of a Line of Credit by ECOPETROL
|
||
3.4.1
|
Credit application
|
||
3.4.2
|
Determination of the Credit Quality of the Client
|
||
3.4.3
|
Officers Authorized for the Analysis and Consideration of Lines of Credit
|
||
3.4.4
|
Amounts above the Ceiling Approved in Lines of Credit
|
||
3.5
|
Acceptable Guarantees
|
||
3.6
|
Follow-up
|
||
3.7
|
Managing the Relation with the Client that Buys on Credit
|
||
3.7.1
|
Sale Prices and Terms
|
||
3.7.2
|
Claims and Discrepancies in Invoicing
|
||
3.8
|
Collection of Receivables
|
||
3.9
|
Guarantees Delivery and Custody
|
||
3.10
|
Late Interests
|
||
3.11
|
Collections Management
|
||
3.11.1
|
Starting Legal Actions to Collect Overdue Balances
|
||
3.11.2
|
Modifications in the Long Term
|
||
3.12
|
Restructuring by General Agreements
|
||
3.13
|
Provision for Accounts Receivables
|
||
3.14
|
Receivables Write-offs
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
|
1.
|
OBJECTIVE
|
|
2.
|
GLOSSARY
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
|
3.
|
GENERAL CONDITIONS.
|
|
3.1
|
Commercial Principles for Credit and Receivables Management.
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
|
3.2
|
Analysis of Credit Quality of the Client
|
|
·
|
Who is the client?
|
|
·
|
What reputation does it have in the market?
|
|
·
|
What has been its history with ECOPETROL?
|
|
·
|
What type of Business does it make?
|
|
·
|
Does it have capacity to meet its commitments?
|
|
3.3
|
Internal Rating by ECOPETROL
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
|
·
|
Any client applying for a line of credit must be subject to a preapproval from the Business Unit providing the service or the division of ECOPETROL in charge of conducting the credit analysis.
|
|
·
|
The risk rating does not guarantee the approval of credit of confidence; ECOPETROL reserves the right of whether or not to approve such type of credit.
|
|
·
|
All guarantees presented must be adjusted in their content to the stipulations of ECOPETROL, and must be issued by an entity equally accepted by the company.
|
|
·
|
All documents in connection with the credit application must remain in ECOPETROL 's files, and as the case may be, those documents were the line of credit is awarded.
|
|
·
|
In case of default by a client of any of the obligations undertaken with ECOPETROL, the Company reserves the right to whether or not accept a restructuring of the debt or to start a legal proceeding.
|
|
·
|
Annually, or with less frequency depending on market conditions, an officer appointed by the Business Unit providing the service must conduct a follow-up, both to the credit quality as well as the line of credit assigned to each client, updating the risk rate before a Risk Rating Agency or by an Agency of Research Service, Collection and Processing of Credit and Company Information approved and accepted by ECOPETROL.
|
|
·
|
Payments in advance
|
|
·
|
Through credits of confidence
|
|
·
|
By means of financial instruments of payment such as banking acceptance or commercial letter of credit.
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
Rating
|
Definition
|
Description
|
Equivalence
(Credit Risk in
the Short Term
|
1
|
Superior
|
Wide and strong capacity to meet commitments.
Minimum risk. May be defined as a client of trust. Sufficient requesting a promissory note with letter of instructions
5
. For larger lines of credit the respective manager and/ or director may increase the lines up to 100% of the lines approved with previous authorization from the corresponding vice-president of the Business Unit providing the service.
The line of credit conservative and liberal recommended by risk rating agencies shall be understood as an indication and does not oblige ECOPETROL with the client, or the respective manager to use this as a ceiling for the approval of the line of credit at the time of defining a line of credit for a client of confidence.
|
Duff / Phelps (D&P):
DP to DP1
BRC Investors Services (BRC):
BRC 1 to BRC 1
Byington:
1 to 2
BPR Asociados (BPR):
A (1.00-1.50)
Bureau Veritas:
1
|
2
|
Average
Superior
|
Sufficient capacity to fulfill commitments.
Low risk.
|
D&P:
DP1-
BRC:
BRC 2
Byington:
2.1 to 2.9
BPR:
B(1.51-2.00)
Bureau Veritas:
2
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3
|
Average
|
Acceptable capacity to fulfill commitments.
Medium risk.
|
D&P:
DP2
BRC:
BRC 2
Byington:
3 to 3.4
Byington (N)
6
:
3 to 3.4
BPR:
C(2.01-2.50)
Bureau Veritas:
3
|
4
|
Average
Inferior
|
Capacity to fulfill commitments; uncertain performance. High risk.
|
D&P:
DP3
BRC:
BRC 3
Byington:
3.5 to 4.0
Byington (N):
2.1 to 3.0
BPR:
D(2.51-2.75)
Bureau Veritas:
4
|
5
|
Low
Quality
|
Uncertainty or inability to fulfill commitments.
High risk.
|
D&P:
DP4 or below
BRC:
BRC 4 or below
Byington:
4.1 to 5.0
Byington (N):
3.1 to 4.5
BPR:
D(2.76-3.00)
Bureau Veritas:
5
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.5
|
Acceptable Guarantees.
|
|
·
|
ECOPETROL shall not make any sales on credit to clients not providing acceptable guarantees except for those clients with internal rating Superior (clients of confidence) or who have been considered in numeral 3.4.2 of this guideline.
|
|
·
|
For the provision of services only guarantees offering endorsement of payment by financial entities will (financial guarantees) shall only be accepted, or those representing securities or instruments that guarantee immediate liquidity when realized.
8
|
|
·
|
The coverage of the guarantees or the amount of financial instruments for payment must be sufficient to cover eventual increases in the price of services.
|
|
·
|
Guarantees in foreign currencies may be accepted (dollars of the United States of America or any other currency) pursuant to the current foreign exchange regulations. If guarantees are in a foreign currency are made effective, they shall be registered in the central bank in order to convert them in the equivalent of the market representative exchange rate from peso with respect to the dollar on the day of payment of the guarantee. Guarantees in currencies different than the US dollar, in order to be accepted, shall require approval from the vice presidency of corporate finance.
|
|
·
|
Only guarantees established in the guide for administration of acceptable guarantees ECP-UTE-G-006 shall be acceptable.
|
|
·
|
Guarantees received by the respective management offices shall be previously reviewed and approved by the legal office advising on the same. The standardization and updating of the respective forms shall be under the responsibility of the legal vice presidency.
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
|
·
|
Acceptance of any other type of guarantee established in the Contracting Manual shall require approval from the respective manager and/or director with previous approval from the legal vice presidency.
|
3.6
|
Follow-up.
|
3.7
|
Managing the Relation with the Client that Buys on Credit.
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.7.1
|
Sale Prices and Terms
|
3.7.2
|
Claims and Discrepancies in Invoicing
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.8
|
Collection of Receivables
|
3.9
|
Guarantees Delivery and Custody
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.10
|
Late Interests
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.11
|
Collections Management
|
3.11.1
|
Starting Legal Actions to Collect Overdue Balances
|
|
-
|
A request memorandum indicating actions undertaken by the Business Unit providing the service and the Coordination of Receivables and collections to obtain recovery of money owed.
|
|
-
|
Documents supporting the credit in favor of ECOPETROL (invoices or promissory notes).
|
|
-
|
Copies of all correspondence held with the client.
|
|
-
|
Copy of the contract or certificate for the provision of services.
|
3.11.2
|
Modifications in the Long Term.
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.12
|
Restructuring by General Agreements.
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.13
|
Provision for Accounts Receivable
10
|
|
·
|
Individual: four debts between 12 and 24 months (33%), between 24 and 36 months (66%) and over 36 months (99%).
|
|
·
|
General: the corresponding percentages are applied depending on the seniority of their Receivables. (5% 3-6 months; 10% 6-12 months; 15% over 12 months).
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.14
|
Receivables Write-offs
|
|
1.
|
CITY AND DATE OF ISSUANCE
|
|
2.
|
POLICY NUMBER
|
|
3.
|
INTERMEDIARY
|
|
4.
|
INSURER
|
|
a)
|
name
|
|
b)
|
tax ID
|
|
5.
|
POLICYHOLDER
|
|
a)
|
name
|
|
b)
|
tax ID
|
|
c)
|
address
|
|
6.
|
ENTITY INSURED (ECOPETROL S A)
|
|
a)
|
name
|
|
b)
|
tax ID
|
|
c)
|
address
|
|
7.
|
BENEFICIARY ENTITY (ECOPETROL S A)
|
|
8.
|
COVERAGE GRANTED
|
|
9.
|
INSURED LIMITS GRANTED FOR EACH COVERAGE
|
|
10.
|
VALIDITY FOR EACH OF THE COVERAGE GRANTED
|
|
a)
|
From
|
at 00:00 hours
|
|
b)
|
Until
|
at 00:00 hours
|
|
c)
|
Days
|
|
11.
|
IDENTIFICATION AND PURPOSE OF THE CONTRACT GUARANTEED BY THE INSURANCE
|
|
12.
|
PARTICULAR CONDITIONS OF THE INSURANCE
|
|
13.
|
PREMIUM FOR EACH OF THE COVERAGE GRANTED
|
|
14.
|
TOTAL PREMIUM FOR ALL COVERAGE CONTRACTED
|
|
15.
|
VALUE ADDED TAX
|
|
16.
|
FINAL PREMIUM TO BE PAID BY THE BONDED POLICYHOLDER AND DATE OF PAYMENT
|
|
17.
|
ADDRESS FOR NOTIFICATION AND COLLECTIONS
|
|
18.
|
CITY
|
|
19.
|
ANNEXES
|
|
20.
|
AUTHORIZED SIGNATURE
|
|
1.
|
COVERAGE FOR SERIOUSNESS OF THE BID
|
|
2.
|
COVERAGE FOR ADVANCEMENT
|
|
3.
|
COVERAGE FOR PREPAYMENT
|
|
4.
|
COVERAGE FOR PERFORMANCE OF THE CONTRACT
|
|
5.
|
COVERAGE FOR THE PAYMENT OF SALARIES, FRINGE BENEFITS AND INDEMNIFICATION
|
|
6.
|
COVERAGE FOR STABILITY OF WORKS
|
|
7.
|
COVERAGE FOR QUALITY OF EQUIPMENT PROVIDED
|
|
8.
|
COVERAGE FOR PROPER OPERATION OF EQUIPMENT
|
|
9.
|
COVERAGE FOR QUALITY OF SERVICE
|
|
10.
|
COVERAGE FOR THE PROVISION OF SPARE PARTS AND ACCESSORIES
|
|
11.
|
OTHER COVERAGE
|
|
1.
|
FORCE MAJEURE OR ACTS OF NATURE
|
|
2.
|
AMENDMENTS TO THE ORIGINAL CONTRACT
|
|
3.
|
INJURIES TO PERSONS OR DAMAGE TO PROPERTY
|
|
4.
|
IMPAIRMENT BY THE PASSING OF TIME
|
|
1.
|
TERM
|
|
2.
|
LOSS CLAIM
|
|
2.1
|
IN THE EVENT OF EXPIRATION
|
|
2.2
|
TO MAKE EFFECTIVE THE PAYMENT OF PENALTY OR THE PENALTY CLAUSE
|
|
2.3
|
IN ALL OTHER EVENTS
|
|
3.
|
PROVING THE AMOUNT TO BE INDEMNIFIED
|
|
4.
|
PAYMENT OF THE LOSS
|
|
5.
|
AMOUNT INSURED
|
|
6.
|
COMPENSATION OF OBLIGATIONS
|
|
7.
|
SUBROGATION
|
|
8.
|
ASSIGNMENT OF THE CONTRACT
|
|
9.
|
COEXISTING INSURANCE
|
|
10.
|
NO EXPIRATION BY FAILURE OF PAYMENT OF THE PREMIUM AND IRREVOCABILITY
|
|
11.
|
CONDUCT OF THE POLICYHOLDER
|
|
12.
|
NOTIFICATION AND RECOURSES
|
|
13.
|
AMENDMENTS
|
|
14.
|
GUARANTEE CALL
|
|
15.
|
VIGILANCE
|
|
16.
|
CO-INSURANCE
|
|
17.
|
BANKRUPTCY PROCEEDINGS
|
|
18.
|
TIME BAR
|
|
19.
|
INCOMPATIBLE CLAUSES
|
|
20.
|
SETTLEMENT OF CONFLICTS
|
|
21.
|
DOMICILE
|
|
1.
|
COVERAGE FOR SERIOUSNESS OF THE BID
|
|
2.
|
COVERAGE FOR ADVANCEMENT
|
|
3.
|
COVERAGE FOR PREPAYMENT
|
|
4.
|
COVERAGE FOR PERFORMANCE OF THE CONTRACT
|
|
5.
|
COVERAGE FOR THE PAYMENT OF SALARIES, FRINGE BENEFITS AND INDEMNIFICATION
|
|
6.
|
COVERAGE FOR STABILITY OF WORKS
|
|
7.
|
COVERAGE FOR QUALITY OF EQUIPMENT PROVIDED
|
|
8.
|
COVERAGE FOR PROPER OPERATION OF EQUIPMENT
|
|
9.
|
COVERAGE FOR QUALITY OF SERVICE
|
|
10.
|
COVERAGE FOR THE PROVISION OF SPARE PARTS AND ACCESSORIES
|
|
11.
|
OTHER COVERAGE
|
|
1.
|
FORCE MAJEURE OR ACTS OF NATURE
|
|
2.
|
AMENDMENTS TO THE ORIGINAL CONTRACT
|
|
3.
|
INJURIES TO PERSONS OR DAMAGE TO PROPERTY
|
|
4.
|
IMPAIRMENT BY THE PASSING OF TIME
|
|
1.
|
TERM
|
|
2.
|
LOSS CLAIM
|
|
2.1
|
IN THE EVENT OF EXPIRATION
|
|
2.2
|
TO MAKE EFFECTIVE THE PAYMENT OF PENALTY OR THE PENALTY CLAUSE
|
|
2.3
|
IN ALL OTHER EVENTS
|
|
3.
|
PROVING THE AMOUNT TO BE INDEMNIFIED
|
|
4.
|
PAYMENT OF THE LOSS
|
|
5.
|
AMOUNT INSURED
|
|
6.
|
COMPENSATION OF OBLIGATIONS
|
|
7.
|
SUBROGATION
|
|
8.
|
ASSIGNMENT OF THE CONTRACT
|
|
9.
|
COEXISTING INSURANCE
|
|
10.
|
NO EXPIRATION BY FAILURE OF PAYMENT OF THE PREMIUM AND IRREVOCABILITY
|
|
11.
|
CONDUCT OF THE POLICYHOLDER
|
|
12.
|
NOTIFICATION AND RECOURSES
|
|
13.
|
AMENDMENTS
|
|
14.
|
GUARANTEE CALL
|
|
15.
|
VIGILANCE
|
|
16.
|
CO-INSURANCE
|
|
17.
|
BANKRUPTCY PROCEEDINGS
|
|
18.
|
TIME BAR
|
|
19.
|
INCOMPATIBLE CLAUSES
|
|
20.
|
SETTLEMENT OF CONFLICTS
|
|
21.
|
DOMICILE
|
Date
|
Bogota D.C. January 30, 2012
|
Contract No.
|
VIT-005-2012
|
SENDER
|
SOLANA PETROLEUM EXPLORATION COLOMBIA LIMITED
|
|
TAX ID
|
830.051.027-8
|
SHIPPER
|
ECOPETROL S.A.
|
|
TAX ID
|
899.999.068-1
|
TYPE OF CRUDE
|
OWN PRODUCTION
|
x
|
PROPERTY
|
Transportation Service of liquid hydrocarbons through the “Trasandino” Pipeline(OTA) and Mansoyá-Orito (OMO) pipeline.
|
Estimated Value of the Contract
|
Six millions seven hundred forty five thousand dollars of The United States of America
(USD$6.745.000).
|
Rate “Mansoyá-Orito” Pipeline (OMO)
|
Cero point five one nine two dollars of The Untied States of America
(USD$0,5192) per Barrel
|
Rate “Trasandino” Pipeline (OTA)
|
Three dollars eleven forty three cents of dollars of The Untied States of America
(USD$3,1143) per Barrel.
|
PRODUCT
|
Daily Average
(Barrels/calendar day)
|
Monthly average
(Barrels/month)
|
Crude
|
10.000
|
300.000
|
TERM OF EXECUTION
|
From January 30, 2012 until July 29, 2012
|
Point
#
|
Type of Point
|
Name of Point
|
Distance
(km)
|
1
|
Point of Entrance
|
Entrance bridle to the srapers tramp in the PK 35+400 of OMO
|
377,3
|
2
|
Point of Exit
|
Exit bridle to the main tanks of Tumaco Plant.
|
Characteristics
|
Lower Limit
|
Upper Limit
|
Temperature
|
120°F
|
|
Viscosity
|
300 cSt 30ºC.
|
|
Water and sediments (BSW)
|
0,5 % in volume
|
|
Salt
|
20 PTB
|
|
Steam pressure
|
Eleven (11) psi at 100°F
|
|
Gravity in API degrees
|
18 degrees
|
50 degrees
|
TYPE OF BOND
|
AMOUNT
|
Performance Insurance Policy
|
Four thousand forty seven millions of Colombian pesos
($4.047.000.000)
|
BY THE SENDER:
|
BY ECOPETROL S.A.:
|
||
Signature
|
“/s/ Duncan Nightingale”
|
Signature
|
“/s/ Rafael Espinosa Rozo”
|
Name:
|
DUNCAN NIGHTINGALE
|
Name:
|
RAFAEL ESPINOSA ROZO
|
Title:
|
Legal Representative
Pasaporte No. BA386341
|
Title:
|
Pipelines Manager
C.C. No. 79.432.773 de Bogotá D.C.
|
Signature
|
“/s/ Hugo Rodriguez”
|
||
Name:
|
HUGO RODRIGUEZ
|
||
Title:
|
Legal Representative
C.C. No. 3.093.980
|
ADDRESS
|
5.1 |
Carrera 7 No. 37 – 69 Piso 9 Edificio Teusacá
|
TELEPHONE | 5.2 | 2343491 |
FAX | 5.3 | 2343532 |
CITY | 5.4 | Bogotá D.C. |
|
1.
|
ECOPETROL is the owner of the pipelines of private use indicated in the Specific Conditions (hereinafter, the “Pipelines”).
|
|
2.
|
Currently the Pipelines have Available Capacity for the shipment of crudes from third parties.
|
|
3.
|
The SENDER has crude oils of its own/production that wishes to ship through the Pipelines under the conditions established in this Contract and its annexes, with the quality specifications set forth by ECOPETROL for its shipment through the Pipelines.
|
|
4.
|
The Parties have agreed to enter into this Contract under the “Spot” shipping contract modality, by virtue of which, the SENDER shall be obliged to pay the shipping fee applicable for the barrels effectively shipped through the Pipelines during the Month of Operation and subject to the existence of Available Capacity.
|
|
5.
|
The SENDER knows and accepts in all its terms the Manual of the Shipper of the Pipelines, which is an integral part of the Contract hereof as Annex 1.
|
|
1.1
|
ECOPETROL is obliged within the terms and conditions set out in this Contract, its annexes and in the applicable regulations, to ship through the Pipeline, from the Entrance Points agreed and detailed in the Specific Conditions to the Exit Points agreed and detailed in Specific Conditions, crudes owned/produced by the SENDER and delivered in the Entrance Points pursuant to the instructions and procedures set out by ECOPETROL (hereinafter, the “Service”).
|
|
1.2
|
By virtue of this Contract and as indicated in the Specific Conditions, the SENDER shall have a limited capacity for shipment by the Pipeline of crudes of its own/production, subject to the existence of Available Capacity during the month of operation of the Service (hereinafter, the “Contracted Capacity”).
|
|
1.3
|
The scope of the obligations of ECOPETROL is limited to the reception, custody, shipment, decanting, and indispensable storage for the transportation and shipment of Crude to the SENDER.
|
|
1.4
|
The Contract hereof does not include the provision of the unloading service in unloading areas, the treatment of crudes, the storage in export terminals, or any terminal services. It is the responsibility of the SENDER to execute or contract these services whenever it may be necessary. The SENDER shall wave and hold ECOPETROL harmless for any damage or prejudice suffered by ECOPETROL as a result of failing to receive the Crude in the Exit Point, either by lack of the services before mentioned or by failing to provide the appropriate facilities for such purpose.
|
|
7.1
|
The SENDER undertakes the obligation to pay irrevocably and unconditionally the Service for the Contracted Capacity, twenty (20) calendar days at the latest, after ECOPETROL files in the offices of the SENDER the invoice for the provision of the Service.
|
|
7.2
|
ECOPETROL shall deliver to the SENDER on the twentieth (20) day of each month at the latest a preliminary account (invoice) with the amount that the SENDER must pay (corresponding to the current month) based on the Nomination made by the SENDER for the current month.
|
|
7.3
|
Considering that the charging for the Service is made on the Nomination of the current month, ECOPETROL in order to make the corresponding adjustment to the nominated volume and the volume of Crude actually shipped, shall generate the corresponding debit and credit vouchers and shall deliver said debit or credit vouchers together with the invoice(s) of the nominated month to be charged. The due date of the debit and credit vouchers shall be the same as for the invoice (with the nominated volume) of the current month in order to facilitate the SENDER the making of only one net payment for both items.
|
|
7.4
|
Payments shall be made in Colombian pesos using the arithmetic average of the representative market exchange rate certified by the Superintendence of Finance or the entity replacing it, of the days of the month corresponding to the Service invoiced.
|
|
7.5
|
The SENDER shall make the payment by means of making a deposit in any of the bank accounts as indicated by ECOPETROL. In case ECOPETROL requires any changes in the bank account, it shall be informed in writing to the SENDER.
|
|
7.6
|
The SENDER is obliged to receive the invoice once ECOPETROL has filed it. Any objections to the invoicing will not interrupt the term for the payment respect to the sums that are not objected by the SENDER, pursuant to the term established in this clause. ECOPETROL shall issue the note credit or equivalent document respect to the sums objected by the SENDER, in order to rectify the inaccuracy.
|
|
7.7
|
ECOPETROL, in order to facilitate and expedite the verification of the invoices by the SENDER shall deliver via e-mail the same day of its preparation and in PDF format, to the account of institutional e-mail registered by the SENDER, a copy of the invoices and corresponding debit and credit vouchers.
|
|
7.8
|
The SENDER shall pay late interests on any unpaid amounts pursuant to the provisions set out by ECOPETROL in the Guidelines for Administration of Service Receivables ECP-UTE-G-008 or a document that modifies or supersedes it, which is an integral part of the Contract hereto as Annex 2.
|
|
7.9
|
The shipment tax shall be invoiced in Colombian pesos upon obtaining the corresponding liquidation from the Ministry of Mines and Energy and shall be paid to ECOPETROL by the SENDER, within the fifteen (15) calendar days after ECOPETROL files in the offices of the SENDER the corresponding bills or invoices.
|
7.10
|
The amounts deposited by the SENDER in any of the bank accounts of ECOPETROL must come from the accounts owned by the SENDER, who by means of written communication before the subscription of the Contract will certify the origin of funds. This in accordance with the Policy for the Prevention and Control of Asset Laundering of ECOPETROL.
|
|
a)
|
Receive in the Entrance Point agreed in the Pipeline, the Crude owned by the SENDER up to the volume corresponding to the Contracted Capacity, subject to the Available Capacity of the Pipeline in the Month of Operation in which the Service is to be provided.
|
|
b)
|
Maintain in custody the Crude delivered from the Point of Entrance until the time of delivery to the SENDER in the Exit Point. Notwithstanding the foregoing, in the event in which the SENDER does not receive the Crude in the Point of Exit pursuant to the agreement, the responsibility by the ECOPETROL to maintain the Crude in custody shall cease.
|
|
c)
|
Shipping and decanting through the Pipeline the Crude delivered by the SENDER from the Point of Entrance until the Exit Point.
|
|
d)
|
Store the Crude from its reception in the Point of Entrance until delivered to the SENDER in the Point of Exit, exclusively to facilitate its shipment under the Contract hereof, not including the storage for export or the segregate storage of Crude.
|
|
e)
|
Deliver the Crudes shipped to the SENDER or whoever is designated as receiver of the same in the Point of Exit, in accordance with the instructions received by the SENDER and with the conditions of the Manual of the Shipper.
|
|
f)
|
ECOPETROL shall not be obliged to receive Crude: (a) when the same fails to fulfill the Specifications of Quality agreed in the Contract hereof; (b) when the SENDER does not have an accepted nomination in the Shipment Schedule of the Pipeline, or (c) when there are not valid agreements of the SENDER that allow the delivery of Crude in the Point of Exit.
|
|
g)
|
Execute all other obligations derived from the nature of the Contract.
|
|
a)
|
Undertake the nomination of the Crudes to be shipped, pursuant to the procedure established in the Manual of the Shipper.
|
|
b)
|
Deliver at the Point of Entrance the Crudes of its own/production included in the Shipment Schedule as a result of the nomination process.
|
|
c)
|
Receive in the Point of Exit the Crudes transported as established in the Manual of the Shipper and the procedures set forth by ECOPETROL, or if a receiver different than the SENDER has been designated, this shall take al necessary measures so that the Crude is received in accordance with the stipulations in the Manual of the Shipper and the procedures set out by ECOPETROL, the SENDER is any case responsible for the reception of the Crude. In case the Crude is not received at the Point of Exit, the provisions established in the Manual of the Shipper shall be applied.
|
|
d)
|
Enter into the contracts with other shippers or terminal operators required to ensure the delivery of crudes at the Point of Exit without affecting the operation of the Pipeline.
|
|
e)
|
Make the Fee payment and all other items as they may apply in the terms and conditions established in the Contract hereof.
|
|
f)
|
Execute the bond in favor of ECOPETROL.
|
|
g)
|
Make the payment of the shipping tax under the conditions set out in this Contract and the law.
|
|
h)
|
Execute all other obligations derived from the nature of the Contract.
|
|
a)
|
In addition to the provisions in the Manual of the Shipper, ECOPETROL shall not be responsible for any faults in the Service, or the loses, damage or deterioration the Crude may suffer, if the fault in the Service, the loss, damage or deterioration of the Crude are due to (i) events of force majeure or acts of nature, (ii) Acts from third parties, (iii) vice inherent to the Crude, or (iv) fault attributable to the Sender (hereinafter, the “Excusable Events”).
|
|
b)
|
ECOPETROL shall only be responsible for the faults in the Service or loses, damage or deterioration the Crude may suffer to the extent it does not demonstrate that (i) no Excusable Event has occurred, and also, (ii) ECOPETROL failed to adopt the reasonable measures any shipper would have taken according to the requirements of operation of a pipeline with similar characteristics to the Pipeline, to avoid the damage or its aggravation.
|
|
c)
|
In all other events, different than those in connection with the provision of the Service, ECOPETROL shall be liable to the extent in incurs in gross negligence.
|
|
d)
|
Save the event of gross negligence or willful misconduct, pursuant to the provisions in this numeral 11.2, the responsibility of ECOPETROL under the Contract hereof under no circumstance shall exceed seventy five per cent (75%) of the value of the Crude lost or damaged by causes attributable to ECOPETROL.
|
|
e)
|
Save the event of gross negligence or willful misconduct, if any claims arise by the SENDER such as the loss of profit, this shall not exceed twenty five percent (25%) of the value that ECOPETROL is obliged to indemnify the SENDER under this numeral 11.2(d) of the Contract hereof.
|
|
a)
|
The SENDER shall be liable for any damage caused to ECOPETROL for the default of its obligations under the Contract hereof and shall be responsible for any damage derived from or as a consequence of the actions or omissions of the SENDER, its workers, subordinates, contractors and subcontractors, except in cases of (i) gross negligence or willful misconduct by ECOPETROL, or (ii) a force majeure or unforeseen circumstances.
|
|
b)
|
The SENDER shall not be waved from its responsibility to pay the Fee agreed in this Contract, save the Service is not provided by causes exclusively attributable to ECOPETROL as indicated in numeral 11.2 b).
|
|
a)
|
ECOPETROL shall notify the SENDER within twenty four hours (24) following the moment of occurrence, making the commitment to submit all details within the following five (5) business days.
|
|
b)
|
ECOPETROL shall carry out all reasonable procedures as required to resume as soon as possible the performance of the obligations of the Contract. Likewise, it shall make efforts to minimize or mitigate any delay or additional costs that may be generated.
|
|
a)
|
Serious default of the obligations of the SENDER without solving them within the Grace Period, when it may apply.
|
|
b)
|
The dissolution of the SENDER as a legal person.
|
|
c)
|
The unauthorized assignment of the Contract by the SENDER.
|
|
d)
|
Due to changes in regulations making more costly the fulfillment of obligations undertaken by ECOPETROL.
|
|
e)
|
As a consequence of any of the following causes: (i) fraud of the SENDER; or (ii) the SENDER incurs in acts or conducts that may endanger the operational and/or technical stability of the Pipelines.
|
|
f)
|
The procedure to be followed by ECOPETROL to terminate the Contract is: notify in writing with at least thirty (30) calendar days in advance to the SENDER its intention to terminate the Contract, indicating the causes for such decision and the effective date of termination. Upon fulfillment of this procedure the SENDER shall not: (i) request any justifications or extensions to the motives explained by ECOPETROL, or (ii) request or demand any kind of compensation or damages derived from the decision to terminate the Contract.
|
|
g)
|
The termination shall not release the Parties from its corresponding obligations and responsibilities attributable to periods before the date of termination of the Contract.
|
|
h)
|
The termination in advance of this Contract shall not release the SENDER from the obligations that survive the termination of the Contract, especially that related with the payment of the Fee pending of payment and the payment of the penal clause. In the event of termination in advance of the Contract, the SENDER shall have a sixty (60) day term following the issuance of the corresponding invoice by ECOPETROL to pay the amount of any overdue fees.
|
|
a)
|
The statement regarding the performance of the obligation undertaken by each of the Parties (or from ECOPETROL if the liquidation is unilateral) derived from the execution of the Contract; and
|
|
b)
|
Any agreements, settlements and transactions reached by the Parties to settle any differences that may have arisen and to obtain the good standing and release of any obligations.
|
|
a)
|
The assignee is a legal person duly organized and the duration of the same shall not be less that the term of the Contract and three (3) more years.
|
|
b)
|
The assignee has an adequate financial capacity to meet the obligations derived from the Contract assigned.
|
|
c)
|
The assignee has Crude of its own/production.
|
|
d)
|
The assignee provides and adequate and acceptable Bond payment to ECOPETROL for the fulfillment of the obligations derived from the Contract.
|
|
a)
|
When the disclosure of information is mandatory by law;
|
|
b)
|
When the disclosure of information is ordered by a competent authority;
|
|
c)
|
When the information in question is of public domain, without any action or omission from the Parties; or
|
|
d)
|
When the entity providing the information authorizes it, in each case, previously and in writing;
|
|
a)
|
Maintain conducts and appropriate controls to ensure an ethical conduct and in accordance with regulations in force.
|
|
b)
|
Refrain from making (directly or indirectly, or through employees, representatives, affiliates or contractors) payments, loans, gifts, gratifications, commissions, to employees, managers, administrators, contractors or suppliers of ECOPETROL, public officials, members of corporations of popular election or political parties, in order to induce such persons to conduct any action or make any decision or use their influence in order to contribute to obtain or retain businesses in connection with the Contract.
|
|
c)
|
Refrain from originating records or inaccurate information, or publish information that affects the image of the other Party when based on assumptions that have not been demonstrated.
|
|
d)
|
Avoid any situation which may generate a conflict of interest.
|
|
e)
|
Communicate mutually and reciprocally any deviation from the line of conduct indicated in this clause.
|
ANNEX 1
|
MANUAL OF THE SHIPPER OF THE ECOPETROL S A PIPELINE
|
ANNEX 2
|
GUIDELINES FOR THE ADMINISTRATION OF RECEIVABLE SERVICES OF ECOPETROL
|
ANNEX 3
|
GENERAL CLAUSES OF ECOPETROL FOR PERFORMANCE POLICIES
|
ANNEX 4
|
STAND-BY LETTER OF CREDIT FORM
|
|
a)
|
delivered personally; or
|
|
b)
|
transmitted by facsimile, electronic mail or any other means through which it may be proved its delivery and reception (with proved reception and confirmation by mail).
|
|
a)
|
On the reception date if delivered personally, or
|
|
b)
|
Twenty four (24) hours after the transmission date, if transmitted by facsimile, electronic mail or any other means through which its delivery and reception may be proved; provided however, confirmation is received within the following three (3) days; whatever occurs first.
|
CLAUSE 1. PURPOSE
|
3
|
CLAUSE 2 DEFINITIONS
|
3
|
CLAUSE 3 GENERAL DESCRIPTION OF THE PIPELINE
|
10
|
CLAUSE 4 OBLIGATIONS OF THE PARTIES
|
10
|
CLAUSE 5 FEES
|
13
|
CLAUSE 6 SPECIAL SERVICES
|
14
|
CLAUSE 7 ADJUSTMENT OF THE EFFECTIVE CAPACITY OF THE SYSTEM DUE TO VARIATIONS IN THE SPECIFICATIONS OF HYDROCARBONS
|
14
|
CLAUSE 8 PROJECTIONS, NOMINATION AND TRANSPORTATION SCHEDULE OF THE PIPELINE
|
15
|
CLAUSE 9 BALANCE IN EXCESS OR DEFECT
|
18
|
CLAUSE 10 PRIORITIES IN THE NOMINATION PROCESS
|
19
|
CLAUSE 11 REJECTION OF A TRANSPORTATION REQUEST
|
20
|
CLAUSE 12 QUALITY REQUIREMENTS
|
21
|
CLAUSE 13 DETERMINATION OF QUANTITIES AND QUALITY
|
22
|
CLAUSE 14 VOLUMETRIC COMPENSATION FOR QUALITY
|
25
|
CLAUSE 15 BULLETIN OF TRANSORTATION BY THE PIPELINE – BTO
|
26
|
CLAUSE 16 SPECIAL TRANSPORTATION CONDITIONS
|
28
|
CLAUSE 17 REGULATIONS FOR THE TRANSPORTATION OF SEGREGATED HYDROCARBON
|
29
|
CLAUSE 18 RISKS AND RESPONSIBILITY
|
29
|
CLAUSE 19 FILLING THE PIPELINE OR FILLING THE LINE
|
31
|
CLAUSE 20 HANDLING LOSSES IN THE PIPELINE
|
31
|
CLAUSE 21 CLAIMS
|
33
|
CLAUSE 22 SANCTIONS TO OPERATING AGENTS FOR NON-PERFORMANCE OF THE TRANSPORTATION SCHEDULE
|
33
|
CLAUSE 23 HYDROCARBON AFFECTED BY LITIGATION
|
34
|
CLAUSE 24 INVESTMENTS IN THE PIPELINE
|
35
|
CLAUSE 25 SOLE RISK PROPOSALS
|
36
|
CLAUSE 26 PROCEDURES FOR COORDINATION OF OPERATIONS, COMMUNICATIONS AND EMERGENCY ASSISTANCE
|
38
|
CLAUSE 27 SETTLEMENT OF CONTROVERSIES
|
39
|
CLAUSE 28 VALIDITY
|
39
|
CLAUSE 29 ADDITIONS AND MODIFICATION
|
39
|
CLAUSE 30 APPLICABLE LEGISLATION
|
39
|
ANNEX 1: MECHANISMS OF QUALITY COMPENSATION FOR THE MIXTURE OF CRUDE OIL
|
40
|
ANNEX 2: DEFINITION OF STANDARD BARRELS PER SYSTEM
|
48
|
ANNEX 3: DESCRIPTION OF THE SYSTEMS
|
49
|
ANNEX 4: MINIMUM SPECIFICATIONS OF QUALITY PER SYSTEM
|
50
|
1.1
|
The Pipeline is for private use considering its nature and in accordance to the provisions in the Colombian Code of Crude Oils.
|
1.2
|
The purpose of this Manual of the Transporter of the Pipeline (hereinafter the “Transporter’s Manual) is to establish the general conditions for the Transportation of Hydrocarbons of the Owners through the Pipeline.
|
1.3
|
Likewise, conditions for the access of Third Parties to the Pipeline are established in those events in which there is Available Capacity in the Pipeline.
|
TEST PARAMETER
|
VALUE OF THE
PARAMETER
|
TEST
STANDARD
|
Sediment and water or particles
|
Not to exceed 0.5% in volume
|
Sediments –ASTM D473
Water – Karl Fisher
|
API at 60 °F
|
Higher than 18 degrees API but less than 50 degrees API
|
D 1298
|
Viscosity @ temperature of reference
|
Not to exceed 300 cSt at 30 °C
|
ASTM D445 or D446
|
Vapor pressure
|
Not to exceed 11 lb/square inch
Reid Vapour Pressure
|
ASTM D323
|
Temperature of reception
|
Not to exceed 120 °F
|
|
Salt content
|
20 PTB
|
ASTM D 3230
|
Point of fluidity
|
Not higher than 12 °C
|
ASTM D 93
|
|
·
|
Stops/ starts of the Pipeline
|
|
·
|
Illegal extractions non-detected
|
|
·
|
Faults in the meter factors
|
|
·
|
Volumetric contractions
|
|
·
|
Leakages/passes in the valves
|
|
·
|
Evaporation
|
|
·
|
Escapes
|
|
·
|
Inherent uncertainties on the measurement systems and associated instrumentation
|
|
·
|
Inherent uncertainties of laboratory analysis associated to the calculation of volumes
|
|
·
|
Propagation of inherent uncertainties of the procedures set out at the international level for the calculation of volumes by static and dynamic measurement.
|
|
·
|
Handling loses inherent to the Pipeline
|
|
1.
|
LOSSES
|
|
2.
|
CRUDE OIL CONSUMPTION
|
|
3.
|
VOLUMETRIC COMPENSATION FOR QUALITY – CVC
|
|
3.1
|
When Crude Oils are delivered to the Pipeline of different quality and from different Senders, the result shall be a Crude Oil with different characteristics of quality and market value than the Crude Oil delivered to the Pipeline by each of the Senders. Due to different qualities of Crude Oil delivered to the Pipeline, some Senders shall withdraw Crude of higher value than the Oil delivered while others shall withdraw Crude Oil with less value than the Oil delivered to the Pipeline.
|
|
3.2
|
SAMPLING AND SYSTEM MEASUREMENT
|
|
3.3
|
CVC PROCEDURES
|
|
3.3.1
|
The Transporter shall administer the CVC process and the Senders may audit the process or request reviews thereto as long as the Transporter is timely informed and a working plan is coordinated between the parties.
|
|
3.3.2
|
The Transporter shall establish monthly the coefficients for adjustments of quality and sulfur pursuant to the criteria established herein.
|
|
3.3.3
|
The CVC shall be settled in kind.
|
|
3.3.4
|
The Transporter shall make monthly adjustments to the corresponding volume of Crude to each Sender, based on the coefficients of adjustment for quality.
|
|
(a)
|
Reduced if such Sender of the Pipeline delivers Crude of lower quality than the average quality of the mix,
|
|
(b)
|
Increased if said Sender of the Pipeline delivers Crude of ah higher quality than the average quality of the mix.
|
|
3.3.5
|
At the latest on the 15
th
day of the calendar month following the Operation, Senders shall report to the Transporter the export prices, the API gravity and the sulfur content of its Crude for the Month of Operation.
|
|
3.3.6
|
Each month of Operation the Transporter shall measure the volumes delivered by the Senders and shall determine the weighted average for the quality parameters of Crude Oils delivered.
|
|
3.3.7
|
The Transporter shall calculate the adjustments to the volume for each Sender and shall determine the Crude volume that corresponds. No adjustment in the volume as a consequence of the CVC shall affect the Transportation fee that a Sender shall Pay to the Transporter.
|
|
3.3.8
|
Senders acknowledge that adjustments to their Crude volumes to be withdrawn as a result of these principles and procedures of the CVC may affect the volume of Crude Oil for a withdrawal afterwards.
|
|
3.3.9
|
Senders are entitled to review the Transporter’s calculations regarding the adjustments by CVC and the due application of this procedure.
|
|
(a)
|
The appropriateness of the Crude Oil reference basket regarding their terms of quality.
|
|
(b)
|
The information on prices available to the public.
|
|
(c)
|
The calculations of the coefficients and the volumes adjusted.
|
3.3.10
|
A data base for the API gravity shall be developed and sulfur content for Crude delivered from reliable samples of laboratory of Crude Oil flows. The quality data of Crude Oil must comply with the following criteria:
|
|
3.4
|
METHODOLOGY FOR CRUDE OIL VALUATION
|
|
3.4.1
|
BASKET OF REFERENCE FOR CRUDE OIL
|
|
3.4.2
|
CALCULATION OF CRUDE OIL PRICES FOR THE BASKET IN THE COAST OF THE GULF
|
|
1.
|
FOB quotation
|
|
-
|
Transportation to the Coast of the Gulf of The United States of America is added using the appropriate vessel size.
|
|
-
|
Customs Tariffs, Oil pollution Liability Insurance, “Superfund” taxes are included and others as appropriate.
|
|
2.
|
CIF quotation
|
|
-
|
Customs Tariffs, Oil pollution Liability Insurance, “Superfund” taxes are included and others as appropriate.
|
|
3.
|
Crude Oil delivered by the Pipeline
|
|
-
|
Any Pipeline fee is added if necessary
|
|
-
|
“Superfund” is included and other fees/tariffs as appropriate.
|
|
3.4.3
|
LINEAR REGRESSION FOR PRICES, GRAVITY AND SULFUR
|
|
3.4.3
|
ADJSUTMENT OF VOLUMES FOR SENDERS (TABLE VI)
|
Degree
|
Origin
|
API, °
|
Sulfur%
|
Source for
Pricing
|
BBL/MT
|
Arab Light
|
Saudi Arabia
|
33.2
|
1.9
|
Argus, Formula
|
7.34
|
Arab Medium
|
Saudi Arabia
|
30.5
|
2.4
|
Argus, Formula
|
7.22
|
Arab Heavy
|
Saudi Arabia
|
27.6
|
2.8
|
Argus, Formula
|
7.09
|
Castilla
|
Colombia
|
18.8
|
2.0
|
Platts
|
6.70
|
LLS
|
US Gulf Coast
|
36.2
|
0.3
|
Argus
|
7.47
|
Mars
|
US Gulf Coast
|
28.0
|
2.1
|
Argus
|
7.15
|
Maya
|
Mexico
|
21.1
|
3.5
|
Argus
|
6.80
|
Napo
|
Ecuador
|
18.0
|
2.3
|
Platts
|
6.66
|
East
|
Ecuador
|
24.0
|
1.2
|
Platts
|
6.93
|
Vasconia
|
Colombia
|
26.5
|
0.9
|
Platts
|
7.04
|
API
|
Sulfur
|
JUN-2010
|
JUL-2010
|
AUG-2010
|
Average of
3 previous
months (1)
|
|
Arab Light
|
33.2
|
1.9
|
77.60
|
76.26
|
76.29
|
76.72
|
Arab Medium
|
30.5
|
2.4
|
75.84
|
74.59
|
74.62
|
75.02
|
Arab Heavy
|
27.6
|
2.8
|
74.34
|
73.32
|
73.25
|
73.64
|
Castilla
|
18.8
|
2.0
|
69.84
|
69.20
|
69.20
|
69.41
|
LLS
|
36.2
|
0.3
|
78.94
|
78.84
|
79.79
|
79.19
|
Mars
|
28.9
|
2.1
|
74.63
|
74.18
|
74.35
|
74.39
|
Maya
|
21.1
|
3.5
|
66.27
|
67.47
|
68.65
|
67.46
|
Napo
|
18.0
|
2.3
|
69.56
|
69.02
|
69.08
|
69.22
|
East
|
24.0
|
1.2
|
72.12
|
71.93
|
72.15
|
72.07
|
Vasconia
|
26.5
|
0.9
|
74.93
|
75.89
|
75.29
|
75.37
|
(2) API, $/API-BBL Coefficient
|
0,495
|
(3) Sulfur, $%S-BBL
|
(1,191)
|
Sender
|
Volume
injected
by sender
MBBL/mo
|
API in
the
injection
point
|
Sulfur in
the
injection
point
|
Relative
value of
the crude
S$/BBL
|
Calculated
Price
$/BBL
|
Total
Volume
adjusted
by sender
MBBL/mo
|
Volume
to adjust
MBBL/mo
|
Sender A
|
900
|
31
|
0.5
|
14.75
|
77.97
|
935
|
36
|
Sender B
|
1,200
|
26
|
1.0
|
11.69
|
74.90
|
1,195
|
(2)
|
Sender C
|
600
|
20
|
2.0
|
7.53
|
70.74
|
566
|
(34)
|
Total
|
2,700
|
2,700
|
-
|
(1)
|
Relative value calculated for mix
|
11.79
|
(2)
|
Average price of exportation of mix, August 2012
|
75.00
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
1.
|
OBJECTIVE
|
||
2.
|
GLOSSARY
|
||
3.
|
GENERAL CONDITIONS
|
||
3.1
|
Commercial Principles for Credit and Receivables Management
|
||
3.2
|
Analysis of Credit Quality of the Client
|
||
3.3
|
Internal Rating by ECOPETROL
|
||
3.3.1
|
Guidelines for the Analysis of the Client
|
||
3.3.2
|
Modalities in which Payments can be Made
|
||
3.3.3
|
Clients with Acceptable Guarantee Created for Purchase
|
||
3.3.4
|
Clients of Leasing
|
||
3.4
|
Process for Approval of a Line of Credit by ECOPETROL
|
||
3.4.1
|
Credit application
|
||
3.4.2
|
Determination of the Credit Quality of the Client
|
||
3.4.3
|
Officers Authorized for the Analysis and Consideration of Lines of Credit
|
||
3.4.4
|
Amounts above the Ceiling Approved in Lines of Credit
|
||
3.5
|
Acceptable Guarantees
|
||
3.6
|
Follow-up
|
||
3.7
|
Managing the Relation with the Client that Buys on Credit
|
||
3.7.1
|
Sale Prices and Terms
|
||
3.7.2
|
Claims and Discrepancies in Invoicing
|
||
3.8
|
Collection of Receivables
|
||
3.9
|
Guarantees Delivery and Custody
|
||
3.10
|
Late Interests
|
||
3.11
|
Collections Management
|
||
3.11.1
|
Starting Legal Actions to Collect Overdue Balances
|
||
3.11.2
|
Modifications in the Long Term
|
||
3.12
|
Restructuring by General Agreements
|
||
3.13
|
Provision for Accounts Receivables
|
||
3.14
|
Receivables Write-offs
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
|
1.
|
OBJECTIVE
|
|
2.
|
GLOSSARY
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.
|
GENERAL CONDITIONS.
|
3.1
|
Commercial Principles for Credit and Receivables Management.
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.2
|
Analysis of Credit Quality of the Client
|
|
·
|
Who is the client?
|
|
·
|
What reputation does it have in the market?
|
|
·
|
What has been its history with ECOPETROL?
|
|
·
|
What type of Business does it make?
|
|
·
|
Does it have capacity to meet its commitments?
|
3.3
|
Internal Rating by ECOPETROL
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
|
·
|
Any client applying for a line of credit must be subject to a preapproval from the Business Unit providing the service or the division of ECOPETROL in charge of conducting the credit analysis.
|
|
·
|
The risk rating does not guarantee the approval of credit of confidence; ECOPETROL reserves the right of whether or not to approve such type of credit.
|
|
·
|
All guarantees presented must be adjusted in their content to the stipulations of ECOPETROL, and must be issued by an entity equally accepted by the company.
|
|
·
|
All documents in connection with the credit application must remain in ECOPETROL 's files, and as the case may be, those documents were the line of credit is awarded.
|
|
·
|
In case of default by a client of any of the obligations undertaken with ECOPETROL, the Company reserves the right to whether or not accept a restructuring of the debt or to start a legal proceeding.
|
|
·
|
Annually, or with less frequency depending on market conditions, an officer appointed by the Business Unit providing the service must conduct a follow-up, both to the credit quality as well as the line of credit assigned to each client, updating the risk rate before a Risk Rating Agency or by an Agency of Research Service, Collection and Processing of Credit and Company Information approved and accepted by ECOPETROL.
|
|
·
|
Payments in advance
|
|
·
|
Through credits of confidence
|
|
·
|
By means of financial instruments of payment such as banking acceptance or commercial letter of credit.
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
Rating
|
Definition
|
Description
|
Equivalence
(Credit Risk in
the Short Term
|
1
|
Superior
|
Wide and strong capacity to meet commitments.
Minimum risk. May be defined as a client of trust. Sufficient requesting a promissory note with letter of instructions
5
. For larger lines of credit the respective manager and/ or director may increase the lines up to 100% of the lines approved with previous authorization from the corresponding vice-president of the Business Unit providing the service.
The line of credit conservative and liberal recommended by risk rating agencies shall be understood as an indication and does not oblige ECOPETROL with the client, or the respective manager to use this as a ceiling for the approval of the line of credit at the time of defining a line of credit for a client of confidence.
|
Duff / Phelps (D&P):
DP to DP1
BRC Investors Services (BRC):
BRC 1 to BRC 1
Byington:
1 to 2
BPR Asociados (BPR):
A (1.00-1.50)
Bureau Veritas:
1
|
2
|
Average
Superior
|
Sufficient capacity to fulfill commitments.
Low risk.
|
D&P:
DP1-
BRC:
BRC 2
Byington:
2.1 to 2.9
BPR:
B(1.51-2.00)
Bureau Veritas:
2
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3
|
Average
|
Acceptable capacity to fulfill commitments.
Medium risk.
|
D&P:
DP2
BRC:
BRC 2
Byington:
3 to 3.4
Byington (N)
6
:
3 to 3.4
BPR:
C(2.01-2.50)
Bureau Veritas:
3
|
4
|
Average
Inferior
|
Capacity to fulfill commitments; uncertain performance. High risk.
|
D&P:
DP3
BRC:
BRC 3
Byington:
3.5 to 4.0
Byington (N):
2.1 to 3.0
BPR:
D(2.51-2.75)
Bureau Veritas:
4
|
5
|
Low
Quality
|
Uncertainty or inability to fulfill commitments.
High risk.
|
D&P:
DP4 or below
BRC:
BRC 4 or below
Byington:
4.1 to 5.0
Byington (N):
3.1 to 4.5
BPR:
D(2.76-3.00)
Bureau Veritas:
5
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.5
|
Acceptable Guarantees.
|
|
·
|
ECOPETROL shall not make any sales on credit to clients not providing acceptable guarantees except for those clients with internal rating Superior (clients of confidence) or who have been considered in numeral 3.4.2 of this guideline.
|
|
·
|
For the provision of services only guarantees offering endorsement of payment by financial entities will (financial guarantees) shall only be accepted, or those representing securities or instruments that guarantee immediate liquidity when realized.
8
|
|
·
|
The coverage of the guarantees or the amount of financial instruments for payment must be sufficient to cover eventual increases in the price of services.
|
|
·
|
Guarantees in foreign currencies may be accepted (dollars of the United States of America or any other currency) pursuant to the current foreign exchange regulations. If guarantees are in a foreign currency are made effective, they shall be registered in the central bank in order to convert them in the equivalent of the market representative exchange rate from peso with respect to the dollar on the day of payment of the guarantee. Guarantees in currencies different than the US dollar, in order to be accepted, shall require approval from the vice presidency of corporate finance.
|
|
·
|
Only guarantees established in the guide for administration of acceptable guarantees ECP-UTE-G-006 shall be acceptable.
|
|
·
|
Guarantees received by the respective management offices shall be previously reviewed and approved by the legal office advising on the same. The standardization and updating of the respective forms shall be under the responsibility of the legal vice presidency.
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
|
·
|
Acceptance of any other type of guarantee established in the Contracting Manual shall require approval from the respective manager and/or director with previous approval from the legal vice presidency.
|
3.6
|
Follow-up.
|
3.7
|
Managing the Relation with the Client that Buys on Credit.
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.7.1
|
Sale Prices and Terms
|
3.7.2
|
Claims and Discrepancies in Invoicing
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.8
|
Collection of Receivables
|
3.9
|
Guarantees Delivery and Custody
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.10
|
Late Interests
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.11
|
Collections Management
|
3.11.1
|
Starting Legal Actions to Collect Overdue Balances
|
|
-
|
A request memorandum indicating actions undertaken by the Business Unit providing the service and the Coordination of Receivables and collections to obtain recovery of money owed.
|
|
-
|
Documents supporting the credit in favor of ECOPETROL (invoices or promissory notes).
|
|
-
|
Copies of all correspondence held with the client.
|
|
-
|
Copy of the contract or certificate for the provision of services.
|
3.11.2
|
Modifications in the Long Term.
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.12
|
Restructuring by General Agreements.
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.13
|
Provision for Accounts Receivable
10
|
|
·
|
Individual: four debts between 12 and 24 months (33%), between 24 and 36 months (66%) and over 36 months (99%).
|
|
·
|
General: the corresponding percentages are applied depending on the seniority of their Receivables. (5% 3-6 months; 10% 6-12 months; 15% over 12 months).
|
ECOPETROL | MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES | ECP-UTE-G-008 |
3.14
|
Receivables Write-offs
|
|
1.
|
CITY AND DATE OF ISSUANCE
|
|
2.
|
POLICY NUMBER
|
|
3.
|
INTERMEDIARY
|
|
4.
|
INSURER
|
|
a)
|
name
|
|
b)
|
tax ID
|
|
5.
|
POLICYHOLDER
|
|
a)
|
name
|
|
b)
|
tax ID
|
|
c)
|
address
|
|
6.
|
ENTITY INSURED (ECOPETROL S A)
|
|
a)
|
name
|
|
b)
|
tax ID
|
|
c)
|
address
|
|
7.
|
BENEFICIARY ENTITY (ECOPETROL S A)
|
|
8.
|
COVERAGE GRANTED
|
|
9.
|
INSURED LIMITS GRANTED FOR EACH COVERAGE
|
|
10.
|
VALIDITY FOR EACH OF THE COVERAGE GRANTED
|
|
a)
|
From
|
at 00:00 hours
|
|
b)
|
Until
|
at 00:00 hours
|
|
c)
|
Days
|
|
11.
|
IDENTIFICATION AND PURPOSE OF THE CONTRACT GUARANTEED BY THE INSURANCE
|
|
12.
|
PARTICULAR CONDITIONS OF THE INSURANCE
|
|
13.
|
PREMIUM FOR EACH OF THE COVERAGE GRANTED
|
|
14.
|
TOTAL PREMIUM FOR ALL COVERAGE CONTRACTED
|
|
15.
|
VALUE ADDED TAX
|
|
16.
|
FINAL PREMIUM TO BE PAID BY THE BONDED POLICYHOLDER AND DATE OF PAYMENT
|
|
17.
|
ADDRESS FOR NOTIFICATION AND COLLECTIONS
|
|
18.
|
CITY
|
|
19.
|
ANNEXES
|
|
20.
|
AUTHORIZED SIGNATURE
|
|
1.
|
COVERAGE FOR SERIOUSNESS OF THE BID
|
|
2.
|
COVERAGE FOR ADVANCEMENT
|
|
3.
|
COVERAGE FOR PREPAYMENT
|
|
4.
|
COVERAGE FOR PERFORMANCE OF THE CONTRACT
|
|
5.
|
COVERAGE FOR THE PAYMENT OF SALARIES, FRINGE BENEFITS AND INDEMNIFICATION
|
|
6.
|
COVERAGE FOR STABILITY OF WORKS
|
|
7.
|
COVERAGE FOR QUALITY OF EQUIPMENT PROVIDED
|
|
8.
|
COVERAGE FOR PROPER OPERATION OF EQUIPMENT
|
|
9.
|
COVERAGE FOR QUALITY OF SERVICE
|
|
10.
|
COVERAGE FOR THE PROVISION OF SPARE PARTS AND ACCESSORIES
|
|
11.
|
OTHER COVERAGE
|
|
1.
|
FORCE MAJEURE OR ACTS OF NATURE
|
|
2.
|
AMENDMENTS TO THE ORIGINAL CONTRACT
|
|
3.
|
INJURIES TO PERSONS OR DAMAGE TO PROPERTY
|
|
4.
|
IMPAIRMENT BY THE PASSING OF TIME
|
|
1.
|
TERM
|
|
2.
|
LOSS CLAIM
|
|
2.1
|
IN THE EVENT OF EXPIRATION
|
|
2.2
|
TO MAKE EFFECTIVE THE PAYMENT OF PENALTY OR THE PENALTY CLAUSE
|
|
2.3
|
IN ALL OTHER EVENTS
|
|
3.
|
PROVING THE AMOUNT TO BE INDEMNIFIED
|
|
4.
|
PAYMENT OF THE LOSS
|
|
5.
|
AMOUNT INSURED
|
|
6.
|
COMPENSATION OF OBLIGATIONS
|
|
7.
|
SUBROGATION
|
|
8.
|
ASSIGNMENT OF THE CONTRACT
|
|
9.
|
COEXISTING INSURANCE
|
|
10.
|
NO EXPIRATION BY FAILURE OF PAYMENT OF THE PREMIUM AND IRREVOCABILITY
|
|
11.
|
CONDUCT OF THE POLICYHOLDER
|
|
12.
|
NOTIFICATION AND RECOURSES
|
|
13.
|
AMENDMENTS
|
|
14.
|
GUARANTEE CALL
|
|
15.
|
VIGILANCE
|
|
16.
|
CO-INSURANCE
|
|
17.
|
BANKRUPTCY PROCEEDINGS
|
|
18.
|
TIME BAR
|
|
19.
|
INCOMPATIBLE CLAUSES
|
|
20.
|
SETTLEMENT OF CONFLICTS
|
|
21.
|
DOMICILE
|
|
1.
|
COVERAGE FOR SERIOUSNESS OF THE BID
|
|
2.
|
COVERAGE FOR ADVANCEMENT
|
|
3.
|
COVERAGE FOR PREPAYMENT
|
|
4.
|
COVERAGE FOR PERFORMANCE OF THE CONTRACT
|
|
5.
|
COVERAGE FOR THE PAYMENT OF SALARIES, FRINGE BENEFITS AND INDEMNIFICATION
|
|
6.
|
COVERAGE FOR STABILITY OF WORKS
|
|
7.
|
COVERAGE FOR QUALITY OF EQUIPMENT PROVIDED
|
|
8.
|
COVERAGE FOR PROPER OPERATION OF EQUIPMENT
|
|
9.
|
COVERAGE FOR QUALITY OF SERVICE
|
|
10.
|
COVERAGE FOR THE PROVISION OF SPARE PARTS AND ACCESSORIES
|
|
11.
|
OTHER COVERAGE
|
|
1.
|
FORCE MAJEURE OR ACTS OF NATURE
|
|
2.
|
AMENDMENTS TO THE ORIGINAL CONTRACT
|
|
3.
|
INJURIES TO PERSONS OR DAMAGE TO PROPERTY
|
|
4.
|
IMPAIRMENT BY THE PASSING OF TIME
|
|
1.
|
TERM
|
|
2.
|
LOSS CLAIM
|
|
2.1
|
IN THE EVENT OF EXPIRATION
|
|
2.2
|
TO MAKE EFFECTIVE THE PAYMENT OF PENALTY OR THE PENALTY CLAUSE
|
|
2.3
|
IN ALL OTHER EVENTS
|
|
3.
|
PROVING THE AMOUNT TO BE INDEMNIFIED
|
|
4.
|
PAYMENT OF THE LOSS
|
|
5.
|
AMOUNT INSURED
|
|
6.
|
COMPENSATION OF OBLIGATIONS
|
|
7.
|
SUBROGATION
|
|
8.
|
ASSIGNMENT OF THE CONTRACT
|
|
9.
|
COEXISTING INSURANCE
|
|
10.
|
NO EXPIRATION BY FAILURE OF PAYMENT OF THE PREMIUM AND IRREVOCABILITY
|
|
11.
|
CONDUCT OF THE POLICYHOLDER
|
|
12.
|
NOTIFICATION AND RECOURSES
|
|
13.
|
AMENDMENTS
|
|
14.
|
GUARANTEE CALL
|
|
15.
|
VIGILANCE
|
|
16.
|
CO-INSURANCE
|
|
17.
|
BANKRUPTCY PROCEEDINGS
|
|
18.
|
TIME BAR
|
|
19.
|
INCOMPATIBLE CLAUSES
|
|
20.
|
SETTLEMENT OF CONFLICTS
|
|
21.
|
DOMICILE
|
Name
|
Base Salary
|
Target Bonus
(2)
|
Dana Coffield
President and Chief Executive Officer
|
$425,000*
($416,340 USD)
|
80%
|
Shane O’Leary
Chief Operating Officer
|
$360,000*
($352,665 USD)
|
70%
|
Martin Eden
(1)
Chief Financial Officer
|
$300,000*
($293,887 USD)
|
70%
|
David Hardy
General Counsel, Vice President Legal, and Secretary
|
$275,000*
($269,397 USD)
|
50%
|
Rafael Orunesu
President, Gran Tierra Energy Argentina
|
$296,535 USD
|
60%
|
Júlio César Moreira
President, Gran Tierra Energy Brazil
|
R$558,830**
($297,916 USD)
|
60%
|
Duncan Nightingale
President, Gran Tierra Energy Colombia
|
$310,000*
($303,683 USD)
|
60%
|
Carlos Monges
President, Gran Tierra Energy Peru
|
S/.679,352***
($251,892 USD)
|
60%
|
James Rozon
(1)
Chief Financial Officer
|
$230,000*
($225,313 USD)
(1)
|
70%
|
BORROWER: | SOLANA RESOURCES LIMITED | ||
|
By:
|
/s/ Heather Campbell
|
|
Name: |
Heather Campbell
|
||
Title: |
Assistant Secretary
|
||
PARENT: | GRAN TIERRA ENERGY INC. | ||
By: | /s/ Dana Coffield | ||
Name: |
Dana Coffield
|
||
Title: |
President and CEO
|
ADMINISTRATIVE AGENT: | BNP PARIBAS, | ||
as Administrative Agent and a Lender | |||
|
By:
|
/s/ Juan Carlos Sandoval | |
Name | Juan Carlos Sandoval | ||
Title | Director | ||
By: | /s/ Edward Pak | ||
Name: | Edward Pak | ||
Title: | Director |
Executed as a DEED by:
|
|||
SOLANA PETROLEUM EXPLORATION
|
|||
(COLUMBIA) LIMITED | |||
|
By:
|
/s/ Heather Campbell
|
|
Name: | Heather Campbell | ||
Title: | Assistant Secretary | ||
GRAN TIERRA EXCHANGECO INC.
|
|||
By: |
/s/ Heather Campbell
|
||
Name: | Heather Campbell | ||
Title: | Assistant Secretary | ||
Executed as a DEED by: | |||
GRAN TIERRA ENERGY INTERNATIONAL | |||
HOLDINGS LTD. | |||
By: |
/s/ Heather Campbell
|
||
Name: | Heather Campbell | ||
Title: | Assistant Secretary |
GRAN TIERRA ENERGY CAYMAN
|
|||
ISLANDS INC. | |||
By:
|
/s/ Heather Campbell
|
||
Name | Heather Campbell | ||
Title | Assistant Secretary | ||
ARGOSY ENERGY, LLC | |||
By: |
/s/ Heather Campbell
|
||
Name: | Heather Campbell | ||
Title: | Assistant Secretary | ||
GRAN TIERRA ENERGY COLOMBIA, LTD.
|
|||
By: |
Argosy Energy, LLC, the general partner of
|
||
Gran Tierra Energy Colombia, Ltd. | |||
By: |
/s/ Heather Campbell
|
||
Name: | Heather Campbell | ||
Title: | Assistant Secretary |
|
1.
|
Section 1.60 of the Agreement shall be deleted in its entirety and replaced with the following:
|
|
2.
|
A new section 1.65 shall be added to the Agreement as follows:
|
3.
|
A new section 1.66 shall be added to the Agreement as follows:
|
4.
|
A new section 1.67 shall be added to the Agreement as follows:
|
|
5.
|
Section 6.3.1 of the Agreement shall be deleted in its entirety and replaced with the following:
|
|
6.
|
Section 6.3.2 of the Agreement shall be deleted in its entirety and replaced with the following:
|
|
7.
|
Section 6.3.3 of the Agreement shall be deleted in its entirety and replaced with the following:
|
|
8.
|
Section 6.3.4 of the Agreement shall be amended so that the language appearing prior to subparagraph 6.3.4(a) is deleted in its entirety and the language of subparagraph (a) is deleted in its entirety and the deleted language is replaced with the following:
|
|
9.
|
Subparagraphs (b) through (e) of Section 6.3.4. shall remain unaffected by this Amendment.
|
|
10.
|
Section 6.3.5 of the Agreement shall be deleted in its entirety and replaced with the following:
|
|
11.
|
Section 7.1.1(A) of the Agreement shall be deleted in its entirety and replaced with the following:
|
|
12.
|
Section 7.1.2(A) of the Agreement shall be deleted in its entirety and replaced with the following:
|
|
13.
|
Section 7.7 of the Agreement shall be amended by inserting the words “or International Financial Reporting Standards” after each reference to “U.S. GAAP”.
|
|
14.
|
Section 7.7.2 of the Agreement shall be amended solely to the extent of deleting the reference to “such Investor” and replacing such deleted words with “Crosby”.
|
|
15.
|
A new subsection 7.8 shall be added to the Agreement as follows:
|
|
16.
|
References to the “Agreement” in the Original Participation Agreement shall be deemed to include the Original Participation Agreement, as amended by Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5 and this Amendment. Except as expressly modified or otherwise as set forth therein or herein, the terms and conditions of the Original Participation Agreement remain in full force and effect.
|
|
17.
|
This Amendment does not alter or amend the Seventh Amended Extension Agreement dated October 7, 2010 between the Parties. Moreover, the Parties do not by execution of this Amendment waive any of their rights pursuant to the Agreement or the Seventh Amended Extension Agreement.
|
|
18.
|
Each Party shall be responsible for and pay all of its own costs and expenses incurred at any time in connection with this amendment.
|
|
19.
|
This Amendment may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart.
|
|
20.
|
A facsimile, telecopy or other reproduction of this Amendment may be executed by one or more parties to this Amendment, and an executed copy of this Amendment may be delivered by one or more parties to this Amendment by facsimile or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution an delivery shall be considered valid, binding and effective for all purposes. At the request of any party to this Amendment, all parties to this Amendment agree to execute an original of this Amendment as well as any facsimile, telecopy or other reproduction of this Amendment.
|
|
21.
|
By their respective signatures below, each Party represents and warrants to the others, that it has full power and authority to execute and deliver this Amendment, that all requisite internal approvals, including approval by the board of directors or other managerial authority has been properly obtained, and that this Amendment shall constitute the legal, valid and binding obligation of such party enforceable in accordance with its terms, except to the extent such enforcement may be subject to bankruptcy, insolvency, reorganization or other similar laws affecting enforcement of creditors’ rights generally.
|
Gran Tierra Energy Colombia, Ltd. | |||
By: | Argosy Energy, LLC (f/k/a/ Argosy | ||
Energy Corp.), its General Partner | |||
|
By:
|
/s/ Julio Moreira | |
Name: Julio Moreira | |||
Title: Manager | |||
Gran Tierra Energy Inc.
|
|||
By: | /s/ Dana Coffield | ||
Name: Dana Coffield | |||
Title: President and CEO | |||
Crosby Capital, LLC | |||
By: | /s/ Jay Allen Chafee | ||
Name: Jay Allen Chaffee | |||
Title: President |
|
GRAN TIERRA ENERGY INC.
, an company
organized and
existing under the laws of the State of Nevada, U.S.A. (”
Gran Tierra
”);
|
|
Martin H. Eden
, an individual ordinarily resident in the City of Calgary in the Province of Alberta (the “
Executive
”);
|
A.
|
Gran Tierra, GTEI and the Executive entered into the Employment Agreement;
|
B.
|
GTEI assigned its interest in the Employment Agreement to GTE ULC; and
|
C.
|
The Parties wish to make certain amendments to the Employment Agreement as set out herein;
|
1.
|
DEFINITIONS
|
2.
|
AMENDMENT OF EMPLOYMENT AGREEMENT
|
(a)
|
deleting Article 1.1 thereof and inserting the following in its place:
|
(b)
|
deleting Article 9.2 thereof and inserting the following in its place:
|
|
“
9.2
Termination by the Company without Cause
|
(c)
|
deleting Schedule “A” and inserting the following in its place:
|
3.
|
ARTICLES INCORPORATED BY REFERENCE
|
GRAN TIERRA ENERGY INC.
|
GRAN TIERRA ENERGY CANADA ULC
|
|||||
By:
|
By:
|
|||||
/s/ Dana Coffield
|
/s/ Dana Coffield
|
|||||
Print Name: Dana Coffield
|
Print Name: Dana Coffield
|
|||||
Title: President and Chief Executive Officer
|
Title: President
|
|||||
Date: | May 3, 2012 | Date: | May 3, 2012 |
SIGNED, SEALED & DELIVERED |
EXECUTIVE:
|
||||
in the presence of: | |||||
/s/ Martin Eden
|
|||||
/s/ Wes Carter | |||||
Martin H. Eden
|
|||||
Witness
|
|||||
Date: May 3, 2012
|
|
David Hardy
, an individual ordinarily resident in the City of Calgary in the Province of Alberta (the “
Executive
”);
|
A.
|
GTEI, Gran Tierra and the Executive entered into the Employment Agreement;
|
B.
|
GTEI assigned its interest in the Employment Agreement to GTE ULC; and
|
C.
|
The Parties wish to make certain amendments to the Employment Agreement as set out herein;
|
1.
|
DEFINITIONS
|
2.
|
AMENDMENT OF EMPLOYMENT AGREEMENT
|
(a)
|
deleting Article 9.2 thereof and inserting the following in its place:
|
|
“
9.2
Termination by the Company without Cause
|
(b)
|
Inserting the following after Article 9 of the Employment Agreement:
|
(a)
|
Gran Tierra shall purchase and maintain, throughout the period during which the Executive acts as a director or officer of Gran Tierra or a Member Company and for a period of two years after the date that the Executive ceases to act as a director or officer of Gran Tierra or a Member Company, directors’ and officers’ liability insurance for the benefit of the Executive and the Executive’s heirs, executors, administrators and other legal representatives, such that the Executive’s insurance coverage is, at all times, at least equal to or better than any insurance coverage Gran Tierra purchases and maintains for the benefit of its then current directors and officers, from time to time.
|
(b)
|
If for any reason whatsoever, any directors’ and officers’ liability insurer asserts that the Executive or the Executive’s heirs, executors, administrators or other legal representatives are subject to a deductible under any existing or future directors’ and officers’ liability insurance purchased and maintained by Gran Tierra for the benefit of the Executive and the Executive’s heirs, executors, administrators and other legal representatives, Gran Tierra shall pay the deductible for and on behalf of the Executive or the Executive’s heirs, executors, administrators or other legal representatives, as the case may be.
|
|
9A.3
Survival
|
3.
|
ARTICLES INCORPORATED BY REFERENCE
|
GRAN TIERRA ENERGY INC.
|
GRAN TIERRA ENERGY CANADA ULC
|
|||
By:
|
By:
|
|||
/s/ Dana Coffield
|
/s/ Dana Coffield
|
|||
Print Name: Dana Coffield
|
Print Name: Dana Coffield
|
|||
Title: President and Chief Executive Officer
|
Title: President
|
|||
Executive
|
||||
/s/ David Hardy
|
||||
David Hardy
|
||||
SIGNED, SEALED & DELIVERED | ||||
in the presence of: | ||||
/s/ Wes Carter | ||||
Witness
|
A.
|
The Executive has specialized knowledge and valuable skills and experience which are critical to the management and success of the business;
|
B.
|
The Company wishes to secure the services of the Executive as the Chief Financial Officer and Principal Financial and Accounting Officer of Gran Tierra;
|
C.
|
The Executive is currently an employee of the Company pursuant to an employment agreement between the GTE ULC (as assignee of Gran Tierra Energy Inc., an Alberta corporation) and the Executive dated May 1, 2008 (the “
Prior Agreement
”); and
|
D.
|
The Parties wish to set forth their entire understanding and agreement with respect to the subject matter herein and replace the Prior Agreement in its entirety with this Executive Employment Agreement (the “
Agreement
”).
|
(a)
|
Voluntary Resignation
|
(b)
|
Cause
|
|
(a)
|
an adverse change in the Executive’s position, titles, duties or responsibilities (including new, additional or changed formal or informal reporting responsibilities) or any failure to re-elect or re-appoint him to any such positions, titles, duties or offices, except in connection with the termination of his employment for Cause;
|
|
(b)
|
a reduction by the Company of the Executive’s Base Salary except to the extent that the annual base salaries of all other executive officers of the Company are similarly reduced or any change in the basis upon which the Executive’s annual compensation is determined or paid if the change is or will be adverse to the Executive except that an award of any annual performance bonuses (including the Bonus) by the Company’s Compensation Committee (and approved by the Board) are discretionary and in no instance shall be considered adverse to Executive if such performance bonus is reduced from a prior year or if an annual performance bonus is not paid;
|
|
(c)
|
a Change in Control (as defined below) of the Company occurs; or
|
|
(d)
|
any breach by the Company of any material provision of this Agreement.
|
|
(a)
|
Gran Tierra shall purchase and maintain, throughout the period during which the Executive acts as a director or officer of Gran Tierra or a Member Company and for a period of two years after the date that the Executive ceases to act as a director or officer of Gran Tierra or a Member Company, directors’ and officers’ liability insurance for the benefit of the Executive and the Executive’s heirs, executors, administrators and other legal representatives, such that the Executive’s insurance coverage is, at all times, at least equal to or better than any insurance coverage Gran Tierra purchases and maintains for the benefit of its then current directors and officers, from time to time.
|
|
(b)
|
If for any reason whatsoever, any directors’ and officers’ liability insurer asserts that the Executive or the Executive’s heirs, executors, administrators or other legal representatives are subject to a deductible under any existing or future directors’ and officers’ liability insurance purchased and maintained by Gran Tierra for the benefit of the Executive and the Executive’s heirs, executors, administrators and other legal representatives, Gran Tierra shall pay the deductible for and on behalf of the Executive or the Executive’s heirs, executors, administrators or other legal representatives, as the case may be.
|
Gran
Tierra Energy Inc.
|
|
300,625-11
th
Avenue S.W.
|
|
Calgary,
Alberta, Canada, T2R 0E1
|
Fax:
(403) 265-3242
|
Attn:
President
|
GRAN TIERRA ENERGY CANADA ULC, an Alberta corporation |
GRAN TIERRA ENERGY INC., a Nevada corporation
|
|||
By:
|
/s/ Dana Coffield |
By:
|
/s/ Dana Coffield | |
Name: Dana Coffield | Name: Dana Coffield | |||
Title: President and CEO | Title: President and CEO | |||
Date: | May 3, 2012 | Date: | May 3, 2012 | |
EXECUTIVE
|
||
By:
|
/s/ James Rozon | |
Date: | May 3, 2012 |
SIGNED, SEALED & DELIVERED | |
In the presence of:T | |
/s/ Wes Carter | |
Witness |
·
|
Management of financing, accounting, treasury, tax, risk management, compliance/reporting and information technology functions of Gran Tierra Energy Inc. and its subsidiaries
|
·
|
Support the CEO and Board by ensuring the financial integrity of the Company.
|
·
|
Ensure the Company’s strong financial position is maintained.
|
·
|
Ensure that the Company’s records and reports accurately reflect the Company’s financial position and results of operations.
|
·
|
Ensure the Company’s financial controls are properly designed and operating effectively.
|
·
|
Provide assurance to the Audit Committee of the Board, auditors, and regulatory bodies on the integrity of the Company’s financial reports and control environment.
|
·
|
Efficient stewardship of cash and working capital.
|
·
|
Accurately monitor costs and financial reporting against budgets and forecasts.
|
·
|
Develop a strong Finance Team.
|
·
|
Coordination of financial functions of operating subsidiaries
|
/s/ Dana Coffield
|
|
Dana Coffield
Chief Executive Officer
|
/s/ James Rozon
|
|
James Rozon
Chief Financial Officer
|
/s/Dana Coffield
|
|
/s/ James Rozon
|
Dana Coffield
|
|
James Rozon
|
Chief Executive Officer
|
|
Chief Financial Officer
|