|
ý
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Nevada
|
|
98-0479924
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
300, 625 11 Avenue S.W.
Calgary, Alberta, Canada T2R 0E1
|
||
(Address of principal executive offices, including zip code)
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
|
|
|
Page
|
PART I
|
Financial Information
|
|
Item 1.
|
Financial Statements
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Item 4.
|
Controls and Procedures
|
|
|
|
|
PART II
|
Other Information
|
|
Item 1.
|
Legal Proceedings
|
|
Item 1A.
|
Risk Factors
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
Item 6.
|
Exhibits
|
|
SIGNATURES
|
||
EXHIBIT INDEX
|
bbl
|
barrel
|
Mcf
|
thousand cubic feet
|
Mbbl
|
thousand barrels
|
MMcf
|
million cubic feet
|
MMbbl
|
million barrels
|
Bcf
|
billion cubic feet
|
BOE
|
barrels of oil equivalent
|
MMBtu
|
million British thermal units
|
MMBOE
|
million barrels of oil equivalent
|
NGL
|
natural gas liquids
|
BOEPD
|
barrels of oil equivalent per day
|
NAR
|
net after royalty
|
BOPD
|
barrels of oil per day
|
|
|
•
|
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.
|
•
|
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.
|
i.
|
The area of the reservoir considered as proved includes:
|
A.
|
The area identified by drilling and limited by fluid contacts, if any, and
|
B.
|
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.
|
ii.
|
In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.
|
iii.
|
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.
|
iv.
|
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:
|
A.
|
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
|
B.
|
The project has been approved for development by all necessary parties and entities, including governmental entities.
|
v.
|
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.
|
•
|
Probable reserves.
Probable reserves are those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.
|
i.
|
When deterministic methods are used, it is as likely as not that actual remaining quantities recovered will exceed the sum of estimated proved plus probable reserves. When probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the proved plus probable reserves estimates.
|
ii.
|
Probable reserves may be assigned to areas of a reservoir adjacent to proved reserves where data control or interpretations of available data are less certain, even if the interpreted reservoir continuity of structure or productivity does not meet the reasonable certainty criterion. Probable reserves may be assigned to areas that are structurally higher than the proved area if these areas are in communication with the proved reservoir.
|
iii.
|
Probable reserves estimates also include potential incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than assumed for proved reserves.
|
iv.
|
See also guidelines in paragraphs (a)(17)(iv) and (a)(17)(vi) of section 210.4-10(a) of Regulations S-X.
|
•
|
Possible reserves.
Possible reserves are those additional reserves that are less certain to be recovered than probable reserves.
|
i.
|
When deterministic methods are used, the total quantities ultimately recovered from a project have a low probability of exceeding proved plus probable plus possible reserves. When probabilistic methods are used, there should be at least a 10% probability that the total quantities ultimately recovered will equal or exceed the proved plus probable plus possible reserves estimates.
|
ii.
|
Possible reserves may be assigned to areas of a reservoir adjacent to probable reserves where data control and interpretations of available data are progressively less certain. Frequently, this will be in areas where geoscience and engineering data are unable to define clearly the area and vertical limits of commercial production from the reservoir by a defined project.
|
iii.
|
Possible reserves also include incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than the recovery quantities assumed for probable reserves.
|
iv.
|
The proved plus probable and proved plus probable plus possible reserves estimates must be based on reasonable alternative technical and commercial interpretations within the reservoir or subject project that are clearly documented, including comparisons to results in successful similar projects.
|
v.
|
Possible reserves may be assigned where geoscience and engineering data identify directly adjacent portions of a reservoir within the same accumulation that may be separated from proved areas by faults with displacement less than formation thickness or other geological discontinuities and that have not been penetrated by a wellbore, and the registrant believes that such adjacent portions are in communication with the known (proved) reservoir. Possible reserves may be assigned to areas that are structurally higher or lower than the proved area if these areas are in communication with the proved reservoir.
|
vi.
|
Pursuant to paragraph (a)(22)(iii) of section 210.4-10(a) of Regulations S-X, where direct observation has defined a HKO elevation and the potential exists for an associated gas cap, proved oil reserves should be assigned in the structurally higher portions of the reservoir above the HKO only if the higher contact can be established with reasonable certainty through reliable technology. Portions of the reservoir that do not meet this reasonable certainty criterion may be assigned as probable and possible oil or gas based on reservoir fluid properties and pressure gradient interpretations.
|
•
|
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.
|
•
|
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.
|
•
|
Probabilistic estimate.
The method of estimating reserves or resources is called probabilistic when the full range of values that could reasonably occur for each unknown parameter (from the geoscience, engineering or economic data) is used to generate a full range of possible outcomes and their associated probabilities of occurrences.
|
•
|
Developed oil and gas reserves
. Developed oil and gas reserves are reserves of any category that can be expected to be recovered:
|
i.
|
Through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared with the cost of a new well; and
|
ii.
|
Through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.
|
•
|
Undeveloped oil and gas reserves
. Undeveloped oil and gas reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.
|
i.
|
Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.
|
ii.
|
Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances, justify a longer time.
|
iii.
|
Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, as defined in paragraph (a)(2) of section 201.4-10(a) of Regulation S-X, or by other evidence using reliable technology establishing reasonable certainty.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
REVENUE AND OTHER INCOME
|
|
|
|
|
|
|
|
|
||||||||
Oil and natural gas sales
|
|
$
|
168,181
|
|
|
$
|
114,542
|
|
|
$
|
372,961
|
|
|
$
|
269,790
|
|
Interest income
|
|
629
|
|
|
608
|
|
|
1,220
|
|
|
1,311
|
|
||||
|
|
168,810
|
|
|
115,150
|
|
|
374,181
|
|
|
271,101
|
|
||||
EXPENSES
|
|
|
|
|
|
|
|
|
||||||||
Operating
|
|
31,902
|
|
|
27,333
|
|
|
72,917
|
|
|
51,820
|
|
||||
Depletion, depreciation, accretion and impairment (Note 4)
|
|
63,022
|
|
|
32,571
|
|
|
121,434
|
|
|
92,938
|
|
||||
General and administrative
|
|
11,746
|
|
|
17,599
|
|
|
23,167
|
|
|
33,498
|
|
||||
Foreign exchange (gain) loss
|
|
(11,980
|
)
|
|
4,807
|
|
|
(17,209
|
)
|
|
29,182
|
|
||||
Other loss (Note 8)
|
|
—
|
|
|
—
|
|
|
4,400
|
|
|
—
|
|
||||
|
|
94,690
|
|
|
82,310
|
|
|
204,709
|
|
|
207,438
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
INCOME BEFORE INCOME TAXES
|
|
74,120
|
|
|
32,840
|
|
|
169,472
|
|
|
63,663
|
|
||||
Income tax expense (Note 7)
|
|
(26,337
|
)
|
|
(19,736
|
)
|
|
(63,776
|
)
|
|
(50,872
|
)
|
||||
NET INCOME AND COMPREHENSIVE INCOME
|
|
47,783
|
|
|
13,104
|
|
|
105,696
|
|
|
12,791
|
|
||||
RETAINED EARNINGS, BEGINNING OF PERIOD
|
|
342,586
|
|
|
184,701
|
|
|
284,673
|
|
|
185,014
|
|
||||
RETAINED EARNINGS, END OF PERIOD
|
|
$
|
390,369
|
|
|
$
|
197,805
|
|
|
$
|
390,369
|
|
|
$
|
197,805
|
|
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME PER SHARE — BASIC
|
|
$
|
0.17
|
|
|
$
|
0.05
|
|
|
$
|
0.37
|
|
|
$
|
0.05
|
|
NET INCOME PER SHARE — DILUTED
|
|
$
|
0.17
|
|
|
$
|
0.05
|
|
|
$
|
0.37
|
|
|
$
|
0.05
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC (Note 5)
|
|
282,822,383
|
|
|
280,714,786
|
|
|
282,482,343
|
|
|
279,726,434
|
|
||||
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED (Note 5)
|
|
285,449,708
|
|
|
284,141,287
|
|
|
285,646,763
|
|
|
283,500,228
|
|
|
June 30,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
281,978
|
|
|
$
|
212,624
|
|
Restricted cash
|
2,549
|
|
|
1,404
|
|
||
Accounts receivable
|
114,128
|
|
|
119,844
|
|
||
Inventory (Note 4)
|
14,720
|
|
|
33,468
|
|
||
Taxes receivable
|
7,562
|
|
|
39,922
|
|
||
Prepaids
|
3,866
|
|
|
4,074
|
|
||
Deferred tax assets (Note 7)
|
1,445
|
|
|
2,517
|
|
||
Total Current Assets
|
426,248
|
|
|
413,853
|
|
||
|
|
|
|
||||
Oil and Gas Properties (using the full cost method of accounting)
|
|
|
|
|
|
||
Proved
|
801,255
|
|
|
813,247
|
|
||
Unproved
|
445,994
|
|
|
383,414
|
|
||
Total Oil and Gas Properties
|
1,247,249
|
|
|
1,196,661
|
|
||
Other capital assets
|
9,610
|
|
|
8,765
|
|
||
Total Property, Plant and Equipment (Note 4)
|
1,256,859
|
|
|
1,205,426
|
|
||
|
|
|
|
||||
Other Long-Term Assets
|
|
|
|
|
|
||
Restricted cash
|
3,924
|
|
|
1,619
|
|
||
Deferred tax assets (Note 7)
|
2,950
|
|
|
1,401
|
|
||
Taxes receivable
|
13,054
|
|
|
1,374
|
|
||
Other long-term assets
|
6,972
|
|
|
6,621
|
|
||
Goodwill
|
102,581
|
|
|
102,581
|
|
||
Total Other Long-Term Assets
|
129,481
|
|
|
113,596
|
|
||
Total Assets
|
$
|
1,812,588
|
|
|
$
|
1,732,875
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current Liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
66,228
|
|
|
$
|
102,263
|
|
Accrued liabilities
|
79,122
|
|
|
66,418
|
|
||
Taxes payable
|
41,784
|
|
|
22,339
|
|
||
Deferred tax liabilities (Note 7)
|
1,599
|
|
|
337
|
|
||
Asset retirement obligation (Note 6)
|
—
|
|
|
28
|
|
||
Total Current Liabilities
|
188,733
|
|
|
191,385
|
|
||
|
|
|
|
||||
Long-Term Liabilities
|
|
|
|
|
|
||
Deferred tax liabilities (Note 7)
|
190,866
|
|
|
225,195
|
|
||
Equity tax payable (Note 7)
|
1,632
|
|
|
3,562
|
|
||
Asset retirement obligation (Note 6)
|
19,615
|
|
|
18,264
|
|
||
Other long-term liabilities
|
7,421
|
|
|
3,038
|
|
||
Total Long-Term Liabilities
|
219,534
|
|
|
250,059
|
|
||
|
|
|
|
||||
Contingencies (Note 8)
|
|
|
|
|
|
||
Shareholders’ Equity
|
|
|
|
|
|
||
Common Stock (Note 5) (271,747,587 and 268,482,445 shares of Common Stock and 11,323,499 and 13,421,488 exchangeable shares, par value $0.001 per share, issued and outstanding as at June 30, 2013 and December 31, 2012, respectively)
|
9,750
|
|
|
7,986
|
|
||
Additional paid in capital
|
1,004,202
|
|
|
998,772
|
|
||
Retained earnings
|
390,369
|
|
|
284,673
|
|
||
Total Shareholders’ Equity
|
1,404,321
|
|
|
1,291,431
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
1,812,588
|
|
|
$
|
1,732,875
|
|
|
Six Months Ended June 30,
|
||||||
|
2013
|
|
2012
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
105,696
|
|
|
$
|
12,791
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|||
Depletion, depreciation, accretion and impairment
|
121,434
|
|
|
92,938
|
|
||
Deferred tax recovery (Note 7)
|
(15,749
|
)
|
|
(10,050
|
)
|
||
Stock-based compensation (Note 5)
|
4,416
|
|
|
6,922
|
|
||
Unrealized foreign exchange (gain) loss
|
(18,366
|
)
|
|
16,164
|
|
||
Settlement of asset retirement obligation (Note 6)
|
—
|
|
|
(404
|
)
|
||
Equity tax
|
(1,718
|
)
|
|
(1,785
|
)
|
||
Other loss (Note 8)
|
4,400
|
|
|
—
|
|
||
Net change in assets and liabilities from operating activities
|
|
|
|
|
|
||
Accounts receivable and other long-term assets
|
3,726
|
|
|
(17,668
|
)
|
||
Inventory
|
13,560
|
|
|
(13,485
|
)
|
||
Prepaids
|
209
|
|
|
154
|
|
||
Accounts payable and accrued and other liabilities
|
(9,314
|
)
|
|
(28,567
|
)
|
||
Taxes receivable and payable
|
40,486
|
|
|
(82,262
|
)
|
||
Net cash provided by (used in) operating activities
|
248,780
|
|
|
(25,252
|
)
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
|
|
||
Increase in restricted cash
|
(3,450
|
)
|
|
(23,006
|
)
|
||
Additions to property, plant and equipment
|
(184,586
|
)
|
|
(178,644
|
)
|
||
Proceeds from oil and gas properties (Note 4)
|
5,597
|
|
|
—
|
|
||
Net cash used in investing activities
|
(182,439
|
)
|
|
(201,650
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
|
|
||
Proceeds from issuance of shares of Common Stock (Note 5)
|
3,013
|
|
|
3,745
|
|
||
Net cash provided by financing activities
|
3,013
|
|
|
3,745
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
69,354
|
|
|
(223,157
|
)
|
||
Cash and cash equivalents, beginning of period
|
212,624
|
|
|
351,685
|
|
||
Cash and cash equivalents, end of period
|
$
|
281,978
|
|
|
$
|
128,528
|
|
|
|
|
|
||||
Cash
|
$
|
279,377
|
|
|
$
|
78,929
|
|
Term deposits
|
2,601
|
|
|
49,599
|
|
||
Cash and cash equivalents, end of period
|
$
|
281,978
|
|
|
$
|
128,528
|
|
|
|
|
|
||||
Supplemental cash flow disclosures:
|
|
|
|
|
|
||
Cash paid for income taxes
|
$
|
12,631
|
|
|
$
|
139,482
|
|
|
|
|
|
||||
Non-cash investing activities:
|
|
|
|
|
|
||
Non-cash net assets and liabilities related to property, plant and equipment, end of period
|
$
|
62,377
|
|
|
$
|
18,447
|
|
|
Six Months Ended June 30,
|
|
Year Ended December 31,
|
||||
|
2013
|
|
2012
|
||||
Share Capital
|
|
|
|
||||
Balance, beginning of period
|
$
|
7,986
|
|
|
$
|
7,510
|
|
Issue of shares of Common Stock (Note 5)
|
1,764
|
|
|
476
|
|
||
Balance, end of period
|
9,750
|
|
|
7,986
|
|
||
|
|
|
|
||||
Additional Paid in Capital
|
|
|
|
|
|
||
Balance, beginning of period
|
998,772
|
|
|
980,014
|
|
||
Issue of shares of Common Stock (Note 5)
|
—
|
|
|
2,902
|
|
||
Exercise of warrants
|
—
|
|
|
1,590
|
|
||
Expiry of warrants
|
—
|
|
|
190
|
|
||
Exercise of stock options (Note 5)
|
1,249
|
|
|
960
|
|
||
Stock-based compensation (Note 5)
|
4,181
|
|
|
13,116
|
|
||
Balance, end of period
|
1,004,202
|
|
|
998,772
|
|
||
|
|
|
|
||||
Warrants
|
|
|
|
|
|
||
Balance, beginning of period
|
—
|
|
|
1,780
|
|
||
Exercise of warrants
|
—
|
|
|
(1,590
|
)
|
||
Expiry of warrants
|
—
|
|
|
(190
|
)
|
||
Balance, end of period
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Retained Earnings
|
|
|
|
|
|
||
Balance, beginning of period
|
284,673
|
|
|
185,014
|
|
||
Net income
|
105,696
|
|
|
99,659
|
|
||
Balance, end of period
|
390,369
|
|
|
284,673
|
|
||
|
|
|
|
||||
Total Shareholders’ Equity
|
$
|
1,404,321
|
|
|
$
|
1,291,431
|
|
|
Three Months Ended June 30, 2013
|
||||||||||||||||||||||
(Thousands of U.S. Dollars, except per unit of production amounts)
|
Colombia
|
|
Argentina
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||||
Oil and natural gas sales
|
$
|
144,333
|
|
|
$
|
17,931
|
|
|
$
|
—
|
|
|
$
|
5,917
|
|
|
$
|
—
|
|
|
$
|
168,181
|
|
Interest income
|
143
|
|
|
304
|
|
|
12
|
|
|
2
|
|
|
168
|
|
|
629
|
|
||||||
Depletion, depreciation, accretion and impairment
|
48,364
|
|
|
7,430
|
|
|
137
|
|
|
6,843
|
|
|
248
|
|
|
63,022
|
|
||||||
Depletion, depreciation, accretion and impairment - per unit of production
|
29.01
|
|
|
26.57
|
|
|
—
|
|
|
102.20
|
|
|
—
|
|
|
31.29
|
|
||||||
Income (loss) before income taxes
|
84,470
|
|
|
(382
|
)
|
|
(2,353
|
)
|
|
(2,887
|
)
|
|
(4,728
|
)
|
|
74,120
|
|
||||||
Segment capital expenditures (1)
|
$
|
48,743
|
|
|
$
|
(540
|
)
|
|
$
|
19,601
|
|
|
$
|
19,981
|
|
|
$
|
228
|
|
|
$
|
88,013
|
|
|
Three Months Ended June 30, 2012
|
||||||||||||||||||||||
(Thousands of U.S. Dollars, except per unit of production amounts)
|
Colombia
|
|
Argentina
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||||
Oil and natural gas sales
|
$
|
92,018
|
|
|
$
|
21,482
|
|
|
$
|
—
|
|
|
$
|
1,042
|
|
|
$
|
—
|
|
|
$
|
114,542
|
|
Interest income
|
223
|
|
|
39
|
|
|
—
|
|
|
273
|
|
|
73
|
|
|
608
|
|
||||||
Depletion, depreciation, accretion and impairment
|
23,084
|
|
|
7,990
|
|
|
991
|
|
|
266
|
|
|
240
|
|
|
32,571
|
|
||||||
Depletion, depreciation, accretion and impairment - per unit of production
|
24.61
|
|
|
23.78
|
|
|
—
|
|
|
23.14
|
|
|
—
|
|
|
25.34
|
|
||||||
Income (loss) before income taxes
|
42,481
|
|
|
1,268
|
|
|
(2,573
|
)
|
|
(1,227
|
)
|
|
(7,109
|
)
|
|
32,840
|
|
||||||
Segment capital expenditures
|
$
|
42,247
|
|
|
$
|
2,739
|
|
|
$
|
16,007
|
|
|
$
|
5,442
|
|
|
$
|
169
|
|
|
$
|
66,604
|
|
|
Six Months Ended June 30, 2013
|
||||||||||||||||||||||
(Thousands of U.S. Dollars, except per unit of production amounts)
|
Colombia
|
|
Argentina
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||||
Oil and natural gas sales
|
$
|
324,336
|
|
|
$
|
36,471
|
|
|
$
|
—
|
|
|
$
|
12,154
|
|
|
$
|
—
|
|
|
$
|
372,961
|
|
Interest income
|
304
|
|
|
547
|
|
|
26
|
|
|
11
|
|
|
332
|
|
|
1,220
|
|
||||||
Depletion, depreciation, accretion and impairment
|
94,320
|
|
|
15,380
|
|
|
199
|
|
|
11,014
|
|
|
521
|
|
|
121,434
|
|
||||||
Depletion, depreciation, accretion and impairment - per unit of production
|
27.63
|
|
|
26.62
|
|
|
—
|
|
|
84.21
|
|
|
—
|
|
|
29.46
|
|
||||||
Income (loss) before income taxes
|
186,138
|
|
|
(2,018
|
)
|
|
(3,580
|
)
|
|
(3,326
|
)
|
|
(7,742
|
)
|
|
169,472
|
|
||||||
Segment capital expenditures (1)
|
$
|
79,150
|
|
|
$
|
4,265
|
|
|
$
|
48,848
|
|
|
$
|
34,520
|
|
|
$
|
239
|
|
|
$
|
167,022
|
|
|
Six Months Ended June 30, 2012
|
||||||||||||||||||||||
(Thousands of U.S. Dollars, except per unit of production amounts)
|
Colombia
|
|
Argentina
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||||
Oil and natural gas sales
|
$
|
230,651
|
|
|
$
|
36,851
|
|
|
$
|
—
|
|
|
$
|
2,288
|
|
|
$
|
—
|
|
|
$
|
269,790
|
|
Interest income
|
427
|
|
|
86
|
|
|
15
|
|
|
567
|
|
|
216
|
|
|
1,311
|
|
||||||
Depletion, depreciation, accretion and impairment
|
55,370
|
|
|
13,915
|
|
|
1,106
|
|
|
22,074
|
|
|
473
|
|
|
92,938
|
|
||||||
Depletion, depreciation, accretion and impairment - per unit of production
|
25.29
|
|
|
23.35
|
|
|
—
|
|
|
919.14
|
|
|
—
|
|
|
33.08
|
|
||||||
Income (loss) before income taxes
|
102,601
|
|
|
791
|
|
|
(3,300
|
)
|
|
(23,297
|
)
|
|
(13,132
|
)
|
|
63,663
|
|
||||||
Segment capital expenditures
|
$
|
62,596
|
|
|
$
|
16,844
|
|
|
$
|
32,662
|
|
|
$
|
41,698
|
|
|
$
|
395
|
|
|
$
|
154,195
|
|
|
As at June 30, 2013
|
||||||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
|
Argentina
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||||
Property, plant and equipment
|
$
|
830,111
|
|
|
$
|
128,234
|
|
|
$
|
144,589
|
|
|
$
|
150,909
|
|
|
$
|
3,016
|
|
|
$
|
1,256,859
|
|
Goodwill
|
102,581
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102,581
|
|
||||||
Other assets
|
206,439
|
|
|
39,594
|
|
|
20,996
|
|
|
9,193
|
|
|
176,926
|
|
|
453,148
|
|
||||||
Total Assets
|
$
|
1,139,131
|
|
|
$
|
167,828
|
|
|
$
|
165,585
|
|
|
$
|
160,102
|
|
|
$
|
179,942
|
|
|
$
|
1,812,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
As at December 31, 2012
|
||||||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
|
Argentina
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||||
Property, plant and equipment
|
$
|
840,027
|
|
|
$
|
138,768
|
|
|
$
|
95,940
|
|
|
$
|
127,394
|
|
|
$
|
3,297
|
|
|
$
|
1,205,426
|
|
Goodwill
|
102,581
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102,581
|
|
||||||
Other assets
|
222,220
|
|
|
47,038
|
|
|
10,880
|
|
|
8,498
|
|
|
136,232
|
|
|
424,868
|
|
||||||
Total Assets
|
$
|
1,164,828
|
|
|
$
|
185,806
|
|
|
$
|
106,820
|
|
|
$
|
135,892
|
|
|
$
|
139,529
|
|
|
$
|
1,732,875
|
|
|
As at June 30, 2013
|
|
As at December 31, 2012
|
||||||||||||||||||||
(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
|
$
|
1,664,350
|
|
|
$
|
(863,095
|
)
|
|
$
|
801,255
|
|
|
$
|
1,562,477
|
|
|
$
|
(749,230
|
)
|
|
$
|
813,247
|
|
Unproved
|
445,994
|
|
|
—
|
|
|
445,994
|
|
|
383,414
|
|
|
—
|
|
|
383,414
|
|
||||||
|
2,110,344
|
|
|
(863,095
|
)
|
|
1,247,249
|
|
|
1,945,891
|
|
|
(749,230
|
)
|
|
1,196,661
|
|
||||||
Furniture and fixtures and leasehold improvements
|
7,682
|
|
|
(5,732
|
)
|
|
1,950
|
|
|
7,575
|
|
|
(5,093
|
)
|
|
2,482
|
|
||||||
Computer equipment
|
13,459
|
|
|
(6,458
|
)
|
|
7,001
|
|
|
10,971
|
|
|
(5,248
|
)
|
|
5,723
|
|
||||||
Automobiles
|
1,352
|
|
|
(693
|
)
|
|
659
|
|
|
1,376
|
|
|
(816
|
)
|
|
560
|
|
||||||
Total Property, Plant and Equipment
|
$
|
2,132,837
|
|
|
$
|
(875,978
|
)
|
|
$
|
1,256,859
|
|
|
$
|
1,965,813
|
|
|
$
|
(760,387
|
)
|
|
$
|
1,205,426
|
|
|
Six Months Ended June 30, 2013
|
||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
|
Argentina
|
|
Peru
|
|
Brazil
|
|
Total
|
||||||||||
Capitalized G&A, including stock-based compensation
|
$
|
10,269
|
|
|
$
|
2,113
|
|
|
$
|
2,932
|
|
|
$
|
2,604
|
|
|
$
|
17,918
|
|
Capitalized stock-based compensation
|
$
|
159
|
|
|
$
|
122
|
|
|
$
|
—
|
|
|
$
|
103
|
|
|
$
|
384
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Six Months Ended June 30, 2012
|
||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
|
Argentina
|
|
Peru
|
|
Brazil
|
|
Total
|
||||||||||
Capitalized G&A, including stock-based compensation
|
$
|
4,219
|
|
|
$
|
1,915
|
|
|
$
|
1,623
|
|
|
$
|
2,107
|
|
|
$
|
9,864
|
|
Capitalized stock-based compensation
|
$
|
190
|
|
|
$
|
148
|
|
|
$
|
—
|
|
|
$
|
193
|
|
|
$
|
531
|
|
|
RSUs
|
Options
|
||||||
|
Number of Outstanding Share Units
|
|
Number of Outstanding Options
|
|
Weighted Average Exercise Price $/Option
|
|||
Balance, December 31, 2012
|
—
|
|
|
15,399,662
|
|
|
5.11
|
|
Granted
|
927,905
|
|
|
2,051,335
|
|
|
6.27
|
|
Exercised
|
—
|
|
|
(1,167,153
|
)
|
|
(2.58
|
)
|
Forfeited
|
(3,170
|
)
|
|
(193,882
|
)
|
|
(6.20
|
)
|
Expired
|
—
|
|
|
(92,595
|
)
|
|
(6.39
|
)
|
Balance, June 30, 2013
|
924,735
|
|
|
15,997,367
|
|
|
5.42
|
|
(Thousands of U.S. Dollars)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Compensation costs for stock options
|
|
$
|
1,932
|
|
|
$
|
4,022
|
|
|
$
|
4,181
|
|
|
$
|
7,453
|
|
Compensation costs for RSUs
|
|
619
|
|
|
—
|
|
|
619
|
|
|
—
|
|
||||
|
|
2,551
|
|
|
4,022
|
|
|
4,800
|
|
|
7,453
|
|
||||
Less: stock-based compensation costs capitalized
|
|
(202
|
)
|
|
(292
|
)
|
|
(384
|
)
|
|
(531
|
)
|
||||
Total stock-based compensation expense
|
|
$
|
2,349
|
|
|
$
|
3,730
|
|
|
$
|
4,416
|
|
|
$
|
6,922
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Weighted average number of common and exchangeable shares outstanding
|
|
282,822,383
|
|
|
280,714,786
|
|
|
282,482,343
|
|
|
279,726,434
|
|
Shares issuable pursuant to warrants
|
|
—
|
|
|
170,145
|
|
|
—
|
|
|
339,495
|
|
Shares issuable pursuant to stock options
|
|
10,400,550
|
|
|
5,942,583
|
|
|
5,610,297
|
|
|
6,078,405
|
|
Shares assumed to be purchased from proceeds of stock options
|
|
(7,773,225
|
)
|
|
(2,686,227
|
)
|
|
(2,445,877
|
)
|
|
(2,644,106
|
)
|
Weighted average number of diluted common and exchangeable shares outstanding
|
|
285,449,708
|
|
|
284,141,287
|
|
|
285,646,763
|
|
|
283,500,228
|
|
|
Six Months Ended
|
|
Year Ended
|
||||
(Thousands of U.S. Dollars)
|
June 30, 2013
|
|
December 31, 2012
|
||||
Balance, beginning of year
|
$
|
18,292
|
|
|
$
|
12,669
|
|
Settlements
|
—
|
|
|
(404
|
)
|
||
Liability incurred
|
675
|
|
|
5,190
|
|
||
Liability assumed in a business combination
|
—
|
|
|
410
|
|
||
Foreign exchange
|
(25
|
)
|
|
45
|
|
||
Accretion
|
673
|
|
|
998
|
|
||
Revisions in estimated liability
|
—
|
|
|
(616
|
)
|
||
Balance, end of period
|
$
|
19,615
|
|
|
$
|
18,292
|
|
|
|
|
|
||||
Asset retirement obligation - current
|
$
|
—
|
|
|
$
|
28
|
|
Asset retirement obligation - long-term
|
19,615
|
|
|
18,264
|
|
||
Balance, end of period
|
$
|
19,615
|
|
|
$
|
18,292
|
|
|
Six Months Ended June 30,
|
||||||
(Thousands of U.S. Dollars)
|
2013
|
|
2012
|
||||
Income (loss) before income taxes
|
|
|
|
||||
United States
|
(4,631
|
)
|
|
$
|
(2,444
|
)
|
|
Foreign
|
174,103
|
|
|
$
|
66,107
|
|
|
|
169,472
|
|
|
63,663
|
|
||
|
35
|
%
|
|
35
|
%
|
||
Income tax expense expected
|
59,315
|
|
|
22,282
|
|
||
Foreign currency translation adjustments
|
(5,257
|
)
|
|
8,101
|
|
||
Impact of foreign taxes
|
1,418
|
|
|
(86
|
)
|
||
Stock-based compensation
|
1,112
|
|
|
2,326
|
|
||
Increase in valuation allowance
|
4,674
|
|
|
5,457
|
|
||
Branch and other foreign loss pick-up
|
(396
|
)
|
|
(2,159
|
)
|
||
Non-deductible third party royalty in Colombia
|
5,749
|
|
|
7,140
|
|
||
Other permanent differences
|
(2,839
|
)
|
|
7,811
|
|
||
Total income tax expense
|
$
|
63,776
|
|
|
$
|
50,872
|
|
|
|
|
|
||||
Current income tax expense
|
|
|
|
||||
United States
|
$
|
726
|
|
|
$
|
(301
|
)
|
Foreign
|
78,799
|
|
|
61,223
|
|
||
|
79,525
|
|
|
60,922
|
|
||
Deferred income tax recovery
|
|
|
|
||||
United States
|
—
|
|
|
—
|
|
||
Foreign
|
(15,749
|
)
|
|
(10,050
|
)
|
||
|
(15,749
|
)
|
|
(10,050
|
)
|
||
Total income tax expense
|
$
|
63,776
|
|
|
$
|
50,872
|
|
|
As at
|
||||||
(Thousands of U.S. Dollars)
|
June 30, 2013
|
|
December 31, 2012
|
||||
Deferred Tax Assets
|
|
|
|
|
|
||
Tax benefit of operating loss carryforwards
|
$
|
56,744
|
|
|
$
|
51,920
|
|
Tax basis in excess of book basis
|
23,658
|
|
|
22,519
|
|
||
Foreign tax credits and other accruals
|
30,449
|
|
|
30,926
|
|
||
Tax benefit of capital loss carryforwards
|
4,202
|
|
|
4,779
|
|
||
Deferred tax assets before valuation allowance
|
115,053
|
|
|
110,144
|
|
||
Valuation allowance
|
(110,658
|
)
|
|
(106,226
|
)
|
||
|
$
|
4,395
|
|
|
$
|
3,918
|
|
|
|
|
|
||||
Deferred tax assets - current
|
$
|
1,445
|
|
|
$
|
2,517
|
|
Deferred tax assets - long-term
|
2,950
|
|
|
1,401
|
|
||
|
4,395
|
|
|
3,918
|
|
||
Deferred tax liabilities - current
|
(1,599
|
)
|
|
(337
|
)
|
||
Deferred tax liabilities - long-term
|
(190,866
|
)
|
|
(225,195
|
)
|
||
|
(192,465
|
)
|
|
(225,532
|
)
|
||
Net Deferred Tax Liabilities
|
$
|
(188,070
|
)
|
|
$
|
(221,614
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
||||||||||
Production (BOEPD) (1)
|
|
22,131
|
|
|
14,127
|
|
|
57
|
|
|
22,775
|
|
|
15,435
|
|
|
48
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Prices Realized - per BOE
|
|
$
|
83.51
|
|
|
$
|
89.10
|
|
|
(6
|
)
|
|
$
|
90.48
|
|
|
$
|
96.04
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenue and Other Income ($000s)
|
|
$
|
168,810
|
|
|
$
|
115,150
|
|
|
47
|
|
|
$
|
374,181
|
|
|
$
|
271,101
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net Income ($000s)
|
|
$
|
47,783
|
|
|
$
|
13,104
|
|
|
265
|
|
|
$
|
105,696
|
|
|
$
|
12,791
|
|
|
726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net Income Per Share - Basic
|
|
$
|
0.17
|
|
|
$
|
0.05
|
|
|
240
|
|
|
$
|
0.37
|
|
|
$
|
0.05
|
|
|
640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net Income Per Share - Diluted
|
|
$
|
0.17
|
|
|
$
|
0.05
|
|
|
240
|
|
|
$
|
0.37
|
|
|
$
|
0.05
|
|
|
640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Funds Flow From Operations ($000s) (2)
|
|
$
|
91,515
|
|
|
$
|
37,633
|
|
|
143
|
|
|
$
|
200,113
|
|
|
$
|
116,576
|
|
|
72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Capital Expenditures ($000s)
|
|
$
|
88,013
|
|
|
$
|
66,604
|
|
|
32
|
|
|
$
|
167,022
|
|
|
$
|
154,195
|
|
|
8
|
|
|
As at
|
||||||||
|
June 30, 2013
|
|
December 31, 2012
|
|
% Change
|
||||
Cash & Cash Equivalents ($000s)
|
$
|
281,978
|
|
|
$
|
212,624
|
|
|
33
|
|
|
|
|
|
|
||||
Working Capital (including cash & cash equivalents) ($000s)
|
$
|
237,515
|
|
|
$
|
222,468
|
|
|
7
|
|
|
|
|
|
|
||||
Property, Plant & Equipment ($000s)
|
$
|
1,256,859
|
|
|
$
|
1,205,426
|
|
|
4
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Funds Flow From Operations - Non-GAAP Measure ($000s)
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net income
|
|
$
|
47,783
|
|
|
$
|
13,104
|
|
|
$
|
105,696
|
|
|
$
|
12,791
|
|
Adjustments to reconcile net income to funds flow from operations
|
|
|
|
|
|
|
|
|
||||||||
DD&A expenses
|
|
63,022
|
|
|
32,571
|
|
|
121,434
|
|
|
92,938
|
|
||||
Deferred tax recovery
|
|
(8,299
|
)
|
|
(4,800
|
)
|
|
(15,749
|
)
|
|
(10,050
|
)
|
||||
Stock-based compensation
|
|
2,349
|
|
|
3,730
|
|
|
4,416
|
|
|
6,922
|
|
||||
Unrealized foreign exchange (gain) loss
|
|
(11,622
|
)
|
|
(5,187
|
)
|
|
(18,366
|
)
|
|
16,164
|
|
||||
Settlement of asset retirement obligation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(404
|
)
|
||||
Equity tax
|
|
(1,718
|
)
|
|
(1,785
|
)
|
|
(1,718
|
)
|
|
(1,785
|
)
|
||||
Other loss
|
|
—
|
|
|
—
|
|
|
4,400
|
|
|
—
|
|
||||
Funds flow from operations
|
|
$
|
91,515
|
|
|
$
|
37,633
|
|
|
$
|
200,113
|
|
|
$
|
116,576
|
|
•
|
For the three and
six months ended June 30, 2013
, oil and gas production, NAR and adjusted for inventory changes,
increase
d by
57%
to
22,131
BOEPD and
increased
by
48%
to
22,775
BOEPD compared with the corresponding periods in
2012
. In Colombia, alternative transportation arrangements to minimize the impact of pipeline disruptions, production from new wells and a decrease in oil inventory had a positive impact on production in 2013. In the three and
six months ended June 30, 2013
, production was
74%
from the Chaza Block in Colombia and
8%
and
5%
from the Puesto Morales and Surubi Blocks in Argentina, respectively.
|
•
|
For the three and
six months ended June 30, 2013
, revenue and other income
increase
d by
47%
to
$168.8 million
and by
38%
to
$374.2 million
compared with
$115.2 million
and
$271.1 million
in the corresponding periods in
2012
, respectively. The positive contribution from higher production levels was partially offset by lower realized prices. The average price realized per BOE
decrease
d by
6%
to
$83.51
and
$90.48
for each of the three and
six months ended June 30, 2013
, from
$89.10
and
$96.04
, in the comparable periods in
2012
, respectively.
|
•
|
Net income was
$47.8 million
, or
$0.17
per share basic and diluted, and
$105.7 million
, or
$0.37
per share basic and diluted, for the three and
six months ended June 30, 2013
, respectively, compared with
$13.1 million
and
$12.8 million
, or
$0.05
per share basic and diluted, in the corresponding periods in
2012
, respectively. In
2013
,
increase
d oil and natural gas sales,
decrease
d general and administrative ("G&A") expenses and a foreign exchange gain were partially offset by
increased
operating, DD&A and income tax expenses.
|
•
|
For the three and
six months ended June 30, 2013
, funds flow from operations
increased
by
143%
to
$91.5 million
and by
72%
to
$200.1 million
, respectively, primarily due to
increase
d oil and natural gas sales and
decrease
d G&A expenses and realized foreign exchange losses, partially offset by
increased
operating and income tax expenses.
|
•
|
Cash and cash equivalents were
$282.0 million
at
June 30, 2013
, compared with
$212.6 million
at
December 31, 2012
. The
increase
in cash and cash equivalents during the
six months ended June 30, 2013
was primarily the result of funds flow from operations of
$200.1 million
, a
$48.7 million
decrease in assets and liabilities from operating activities, partially offset by capital expenditures, net of proceeds from oil and gas properties, of
$179.0 million
.
|
•
|
Working capital (including cash and cash equivalents) was
$237.5 million
at
June 30, 2013
, a
$15.0 million
increase
from
December 31, 2012
.
|
•
|
Property, plant and equipment at
June 30, 2013
, was
$1.3 billion
, an
increase
of
$51.4 million
from
December 31, 2012
, as a result of
$167.0 million
of net capital expenditures (excluding changes in non-cash working capital), partially offset by
$115.6 million
of depletion, depreciation and impairment expenses.
|
•
|
Our net capital expenditures for the
six months ended June 30, 2013
, were
$167.0 million
compared with
$154.2 million
for the
six months ended June 30, 2012
. In
2013
, capital expenditures included drilling of
$117.1 million
, geological and geophysical (“G&G”) expenditures of
$25.6 million
, facilities of
$18.6 million
and other expenditures of
$11.3 million
. Capital expenditures in 2013 were offset by proceeds from oil and gas properties of
$5.6 million
.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
||||||||||
(Thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas sales
|
|
$
|
168,181
|
|
|
$
|
114,542
|
|
|
47
|
|
|
$
|
372,961
|
|
|
$
|
269,790
|
|
|
38
|
|
Interest income
|
|
629
|
|
|
608
|
|
|
3
|
|
|
1,220
|
|
|
1,311
|
|
|
(7
|
)
|
||||
|
|
168,810
|
|
|
115,150
|
|
|
47
|
|
|
374,181
|
|
|
271,101
|
|
|
38
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
31,902
|
|
|
27,333
|
|
|
17
|
|
|
72,917
|
|
|
51,820
|
|
|
41
|
|
||||
DD&A expenses
|
|
63,022
|
|
|
32,571
|
|
|
93
|
|
|
121,434
|
|
|
92,938
|
|
|
31
|
|
||||
G&A expenses
|
|
11,746
|
|
|
17,599
|
|
|
(33
|
)
|
|
23,167
|
|
|
33,498
|
|
|
(31
|
)
|
||||
Foreign exchange (gain) loss
|
|
(11,980
|
)
|
|
4,807
|
|
|
(349
|
)
|
|
(17,209
|
)
|
|
29,182
|
|
|
(159
|
)
|
||||
Other loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,400
|
|
|
—
|
|
|
—
|
|
||||
|
|
94,690
|
|
|
82,310
|
|
|
15
|
|
|
204,709
|
|
|
207,438
|
|
|
(1
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
|
74,120
|
|
|
32,840
|
|
|
126
|
|
|
169,472
|
|
|
63,663
|
|
|
166
|
|
||||
Income tax expense
|
|
(26,337
|
)
|
|
(19,736
|
)
|
|
33
|
|
|
(63,776
|
)
|
|
(50,872
|
)
|
|
25
|
|
||||
Net income
|
|
$
|
47,783
|
|
|
$
|
13,104
|
|
|
265
|
|
|
$
|
105,696
|
|
|
$
|
12,791
|
|
|
726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Production
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and NGL's, bbl
|
|
1,960,896
|
|
|
1,223,289
|
|
|
60
|
|
|
4,013,633
|
|
|
2,684,693
|
|
|
50
|
|
||||
Natural gas, Mcf
|
|
318,071
|
|
|
373,710
|
|
|
(15
|
)
|
|
650,684
|
|
|
746,657
|
|
|
(13
|
)
|
||||
Total production, BOE (1)
|
|
2,013,908
|
|
1,285,574
|
|
57
|
|
|
4,122,081
|
|
2,809,136
|
|
47
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Prices
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and NGL's per bbl
|
|
$
|
85.03
|
|
|
$
|
92.48
|
|
|
(8
|
)
|
|
$
|
92.26
|
|
|
$
|
99.49
|
|
|
(7
|
)
|
Natural gas per Mcf
|
|
$
|
4.54
|
|
|
$
|
3.78
|
|
|
20
|
|
|
$
|
4.07
|
|
|
$
|
3.60
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated Results of Operations per BOE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Oil and natural gas sales
|
|
$
|
83.51
|
|
|
$
|
89.10
|
|
|
(6
|
)
|
|
$
|
90.48
|
|
|
$
|
96.04
|
|
|
(6
|
)
|
Interest income
|
|
0.31
|
|
|
0.47
|
|
|
(34
|
)
|
|
0.30
|
|
|
0.47
|
|
|
(36
|
)
|
||||
|
|
83.82
|
|
|
89.57
|
|
|
(6
|
)
|
|
90.78
|
|
|
96.51
|
|
|
(6
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating expenses
|
|
15.84
|
|
|
21.26
|
|
|
(25
|
)
|
|
17.69
|
|
|
18.45
|
|
|
(4
|
)
|
||||
DD&A expenses
|
|
31.29
|
|
|
25.34
|
|
|
23
|
|
|
29.46
|
|
|
33.08
|
|
|
(11
|
)
|
||||
G&A expenses
|
|
5.83
|
|
|
13.69
|
|
|
(57
|
)
|
|
5.62
|
|
|
11.92
|
|
|
(53
|
)
|
||||
Foreign exchange (gain) loss
|
|
(5.95
|
)
|
|
3.74
|
|
|
(259
|
)
|
|
(4.17
|
)
|
|
10.39
|
|
|
(140
|
)
|
||||
Other loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.07
|
|
|
—
|
|
|
—
|
|
||||
|
|
47.01
|
|
64.03
|
|
(27
|
)
|
|
49.67
|
|
73.84
|
|
(33
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes
|
|
36.81
|
|
|
25.54
|
|
|
44
|
|
|
41.11
|
|
|
22.67
|
|
|
81
|
|
||||
Income tax expense
|
|
(13.08
|
)
|
|
(15.35
|
)
|
|
(15
|
)
|
|
(15.47
|
)
|
|
(18.11
|
)
|
|
(15
|
)
|
||||
Net income
|
|
$
|
23.73
|
|
|
$
|
10.19
|
|
|
133
|
|
|
$
|
25.64
|
|
|
$
|
4.56
|
|
|
462
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
||||||||||
(Thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas sales
|
|
$
|
144,333
|
|
|
$
|
92,018
|
|
|
57
|
|
|
$
|
324,336
|
|
|
$
|
230,651
|
|
|
41
|
|
Interest income
|
|
143
|
|
|
223
|
|
|
(36
|
)
|
|
304
|
|
|
427
|
|
|
(29
|
)
|
||||
|
|
144,476
|
|
|
92,241
|
|
|
57
|
|
|
324,640
|
|
|
231,078
|
|
|
40
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
22,349
|
|
|
17,721
|
|
|
26
|
|
|
52,301
|
|
|
34,195
|
|
|
53
|
|
||||
DD&A expenses
|
|
48,364
|
|
|
23,084
|
|
|
110
|
|
|
94,320
|
|
|
55,370
|
|
|
70
|
|
||||
G&A expenses
|
|
3,379
|
|
|
6,976
|
|
|
(52
|
)
|
|
8,015
|
|
|
13,575
|
|
|
(41
|
)
|
||||
Foreign exchange (gain) loss
|
|
(14,086
|
)
|
|
1,979
|
|
|
(812
|
)
|
|
(20,534
|
)
|
|
25,337
|
|
|
(181
|
)
|
||||
Other loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,400
|
|
|
—
|
|
|
—
|
|
||||
|
|
60,006
|
|
|
49,760
|
|
|
21
|
|
|
138,502
|
|
|
128,477
|
|
|
8
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
|
$
|
84,470
|
|
|
$
|
42,481
|
|
|
99
|
|
|
$
|
186,138
|
|
|
$
|
102,601
|
|
|
81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Production
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and NGL's, bbl
|
|
1,665,555
|
|
|
928,258
|
|
|
79
|
|
|
3,411,881
|
|
|
2,177,839
|
|
|
57
|
|
||||
Natural gas, Mcf
|
|
10,468
|
|
|
58,686
|
|
|
(82
|
)
|
|
10,468
|
|
|
68,160
|
|
|
(85
|
)
|
||||
Total production, BOE (1)
|
|
1,667,300
|
|
|
938,039
|
|
|
78
|
|
|
3,413,626
|
|
|
2,189,199
|
|
|
56
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Prices
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and NGL's per bbl
|
|
$
|
86.61
|
|
|
$
|
98.96
|
|
|
(12
|
)
|
|
$
|
95.04
|
|
|
$
|
105.82
|
|
|
(10
|
)
|
Natural gas per Mcf
|
|
$
|
7.18
|
|
|
$
|
2.62
|
|
|
174
|
|
|
$
|
7.18
|
|
|
$
|
2.73
|
|
|
163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segmented Results of Operations per BOE
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas sales
|
|
$
|
86.57
|
|
|
$
|
98.10
|
|
|
(12
|
)
|
|
$
|
95.01
|
|
|
$
|
105.36
|
|
|
(10
|
)
|
Interest income
|
|
0.09
|
|
|
0.24
|
|
|
(63
|
)
|
|
0.09
|
|
|
0.20
|
|
|
(55
|
)
|
||||
|
|
86.66
|
|
|
98.34
|
|
|
(12
|
)
|
|
95.10
|
|
|
105.56
|
|
|
(10
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
13.40
|
|
|
18.89
|
|
|
(29
|
)
|
|
15.32
|
|
|
15.62
|
|
|
(2
|
)
|
||||
DD&A expenses
|
|
29.01
|
|
|
24.61
|
|
|
18
|
|
|
27.63
|
|
|
25.29
|
|
|
9
|
|
||||
G&A expenses
|
|
2.03
|
|
|
7.44
|
|
|
(73
|
)
|
|
2.35
|
|
|
6.20
|
|
|
(62
|
)
|
||||
Foreign exchange (gain) loss
|
|
(8.45
|
)
|
|
2.11
|
|
|
(500
|
)
|
|
(6.02
|
)
|
|
11.57
|
|
|
(152
|
)
|
||||
Other loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.29
|
|
|
—
|
|
|
—
|
|
||||
|
|
35.99
|
|
|
53.05
|
|
|
(32
|
)
|
|
40.57
|
|
|
58.68
|
|
|
(31
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
|
$
|
50.67
|
|
|
$
|
45.29
|
|
|
12
|
|
|
$
|
54.53
|
|
|
$
|
46.88
|
|
|
16
|
|
(1)
|
Production represents production volumes NAR adjusted for inventory changes.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Millions of U.S. Dollars)
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Drilling and completions
|
|
$
|
24.8
|
|
|
$
|
29.9
|
|
|
$
|
39.7
|
|
|
$
|
40.4
|
|
G&G
|
|
11.3
|
|
|
4.5
|
|
|
16.6
|
|
|
6.2
|
|
||||
Facilities and equipment
|
|
10.5
|
|
|
3.3
|
|
|
16.7
|
|
|
10.6
|
|
||||
Other
|
|
3.6
|
|
|
4.6
|
|
|
7.7
|
|
|
5.4
|
|
||||
|
|
$
|
50.2
|
|
|
$
|
42.3
|
|
|
$
|
80.7
|
|
|
$
|
62.6
|
|
•
|
On the Chaza Block (100% working interest ("WI"), operated), we drilled the Moqueta-10 development well in the Moqueta field. This well is expected to be completed as an oil producer until water breakthrough occurs, then converted to a water injector as originally planned. The Moqueta-11 development well was successfully drilled and testing has been initiated. In the Costayaco field, we completed the Costayaco-17 development well as a water injector well and the Costayaco-18 development well as a producing well.
|
•
|
Together with our partner, we commenced drilling the Mayalito-1 exploration well on the Llanos-22 Block (45% WI, non-operated).
|
•
|
We continued civil construction for one gross exploration well on the Guayuyaco Block (70% WI, operated).
|
•
|
We started 3-D seismic on the Putumayo-1 Block (55% WI, operated) and acquired 2-D seismic on the Magdalena Block (100% WI, operated).
|
•
|
We also continued facilities work at the Costayaco and Moqueta fields on the Chaza Block, the Llanos-22 Block and the Guayuyaco Block.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
||||||||||
(Thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas sales
|
$
|
17,931
|
|
|
$
|
21,482
|
|
|
(17
|
)
|
|
$
|
36,471
|
|
|
$
|
36,851
|
|
|
(1
|
)
|
Interest income
|
304
|
|
|
39
|
|
|
679
|
|
|
547
|
|
|
86
|
|
|
536
|
|
||||
|
18,235
|
|
|
21,521
|
|
|
(15
|
)
|
|
37,018
|
|
|
36,937
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
7,933
|
|
|
8,947
|
|
|
(11
|
)
|
|
16,904
|
|
|
16,293
|
|
|
4
|
|
||||
DD&A expenses
|
7,430
|
|
|
7,990
|
|
|
(7
|
)
|
|
15,380
|
|
|
13,915
|
|
|
11
|
|
||||
G&A expenses
|
2,618
|
|
|
2,759
|
|
|
(5
|
)
|
|
4,992
|
|
|
5,010
|
|
|
—
|
|
||||
Foreign exchange loss
|
636
|
|
|
557
|
|
|
14
|
|
|
1,760
|
|
|
928
|
|
|
90
|
|
||||
|
18,617
|
|
|
20,253
|
|
|
(8
|
)
|
|
39,036
|
|
|
36,146
|
|
|
8
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Loss) income before income taxes
|
$
|
(382
|
)
|
|
$
|
1,268
|
|
|
(130
|
)
|
|
$
|
(2,018
|
)
|
|
$
|
791
|
|
|
(355
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Production
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and NGL's, bbl
|
228,382
|
|
|
283,538
|
|
|
(19
|
)
|
|
470,959
|
|
|
482,838
|
|
|
(2
|
)
|
||||
Natural gas, Mcf
|
307,603
|
|
|
315,024
|
|
|
(2
|
)
|
|
640,216
|
|
|
678,497
|
|
|
(6
|
)
|
||||
Total production, BOE (1)
|
279,649
|
|
|
336,042
|
|
|
(17
|
)
|
|
577,662
|
|
|
595,921
|
|
|
(3
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Prices
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and NGL's per bbl
|
$
|
72.32
|
|
|
$
|
71.32
|
|
|
1
|
|
|
$
|
71.80
|
|
|
$
|
71.13
|
|
|
1
|
|
Natural gas per Mcf
|
$
|
4.60
|
|
|
$
|
4.00
|
|
|
15
|
|
|
$
|
4.15
|
|
|
$
|
3.69
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segmented Results of Operations per BOE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas sales
|
$
|
64.12
|
|
|
$
|
63.93
|
|
|
—
|
|
|
$
|
63.14
|
|
|
$
|
61.84
|
|
|
2
|
|
Interest income
|
1.09
|
|
|
0.12
|
|
|
808
|
|
|
0.95
|
|
|
0.14
|
|
|
579
|
|
||||
|
65.21
|
|
|
64.05
|
|
|
2
|
|
|
64.09
|
|
|
61.98
|
|
|
3
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
28.37
|
|
|
26.62
|
|
|
7
|
|
|
29.26
|
|
|
27.34
|
|
|
7
|
|
||||
DD&A expenses
|
26.57
|
|
|
23.78
|
|
|
12
|
|
|
26.62
|
|
|
23.35
|
|
|
14
|
|
||||
G&A expenses
|
9.36
|
|
|
8.21
|
|
|
14
|
|
|
8.64
|
|
|
8.41
|
|
|
3
|
|
||||
Foreign exchange loss
|
2.27
|
|
|
1.66
|
|
|
37
|
|
|
3.05
|
|
|
1.56
|
|
|
96
|
|
||||
|
66.57
|
|
|
60.27
|
|
|
10
|
|
|
67.57
|
|
|
60.66
|
|
|
11
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Loss) income before income taxes
|
$
|
(1.36
|
)
|
|
$
|
3.78
|
|
|
(136
|
)
|
|
$
|
(3.48
|
)
|
|
$
|
1.32
|
|
|
(364
|
)
|
(1)
|
Production represents production volumes NAR adjusted for inventory changes.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
||||||||||
(Thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
$
|
12
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
26
|
|
|
$
|
15
|
|
|
73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
—
|
|
|
80
|
|
|
(100
|
)
|
|
—
|
|
|
$
|
161
|
|
|
(100
|
)
|
|||
DD&A expenses
|
137
|
|
|
991
|
|
|
(86
|
)
|
|
199
|
|
|
1,106
|
|
|
(82
|
)
|
||||
G&A expenses
|
1,381
|
|
|
1,466
|
|
|
(6
|
)
|
|
2,387
|
|
|
2,082
|
|
|
15
|
|
||||
Foreign exchange loss (gain)
|
847
|
|
|
36
|
|
|
—
|
|
|
1,020
|
|
|
(34
|
)
|
|
—
|
|
||||
|
2,365
|
|
|
2,573
|
|
|
(8
|
)
|
|
3,606
|
|
|
3,315
|
|
|
9
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss before income taxes
|
$
|
(2,353
|
)
|
|
$
|
(2,573
|
)
|
|
(9
|
)
|
|
$
|
(3,580
|
)
|
|
$
|
(3,300
|
)
|
|
8
|
|
•
|
On Block 95 (100% WI, operated), we completed drilling and initial testing of a horizontal side-track extension of the Bretaña Norte 95-2-1XD exploration well. A production test was conducted over the horizontal length of the sidetrack. A final rate of approximately 1,699 BOPD was produced on natural flow with 0% water cut, through a 32/64 inch choke. The choke size was then increased to a 64/64 inch and the oil flow increased to approximately 3,095 BOPD on natural flow with 0% water cut. Wellhead flowing pressure was increasing during the first test indicating the formation was cleaning up. Cumulative production for both testing periods was approximately 3,552 barrels of oil and testing was concluded when available storage capacity had been achieved. We initiated a preliminary Front End Engineering Design ("FEED") study for the Bretaña Norte field development and continued work to obtain the necessary environmental and social permits for future drilling activities and seismic programs.
|
•
|
On Block 133 (100% WI, operated), we completed an aeromagnetic and aerogravity survey and processing and interpretation of this data is ongoing.
|
•
|
On Block 107 (100% WI, operated), we continued work to obtain the necessary environmental and social permits for future seismic programs.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
||||||||||
(Thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas sales
|
$
|
5,917
|
|
|
$
|
1,042
|
|
|
468
|
|
|
$
|
12,154
|
|
|
$
|
2,288
|
|
|
431
|
|
Interest income
|
2
|
|
|
273
|
|
|
(99
|
)
|
|
11
|
|
|
567
|
|
|
(98
|
)
|
||||
|
5,919
|
|
|
1,315
|
|
|
350
|
|
|
12,165
|
|
|
2,855
|
|
|
326
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
1,621
|
|
|
586
|
|
|
177
|
|
|
3,712
|
|
|
1,171
|
|
|
217
|
|
||||
DD&A expenses
|
6,843
|
|
|
266
|
|
|
2,473
|
|
|
11,014
|
|
|
22,074
|
|
|
(50
|
)
|
||||
G&A expenses
|
317
|
|
|
456
|
|
|
(30
|
)
|
|
743
|
|
|
1,137
|
|
|
(35
|
)
|
||||
Foreign exchange loss
|
25
|
|
|
1,234
|
|
|
(98
|
)
|
|
22
|
|
|
1,770
|
|
|
(99
|
)
|
||||
|
8,806
|
|
|
2,542
|
|
|
246
|
|
|
15,491
|
|
|
26,152
|
|
|
(41
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss before income taxes
|
$
|
(2,887
|
)
|
|
$
|
(1,227
|
)
|
|
135
|
|
|
$
|
(3,326
|
)
|
|
$
|
(23,297
|
)
|
|
(86
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Production (1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and NGL's, bbl
|
66,959
|
|
|
11,493
|
|
|
483
|
|
|
130,793
|
|
|
24,016
|
|
|
445
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Prices
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and NGL's per bbl
|
$
|
88.37
|
|
|
$
|
90.66
|
|
|
(3
|
)
|
|
$
|
92.93
|
|
|
$
|
95.27
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segmented Results of Operations per bbl
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas sales
|
$
|
88.37
|
|
|
$
|
90.66
|
|
|
(3
|
)
|
|
$
|
92.93
|
|
|
$
|
95.27
|
|
|
(2
|
)
|
Interest income
|
0.03
|
|
|
23.75
|
|
|
(100
|
)
|
|
0.08
|
|
|
23.61
|
|
|
(100
|
)
|
||||
|
88.40
|
|
|
114.41
|
|
|
(23
|
)
|
|
93.01
|
|
|
118.88
|
|
|
(22
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
24.21
|
|
|
50.99
|
|
|
(53
|
)
|
|
28.38
|
|
|
48.76
|
|
|
(42
|
)
|
||||
DD&A expenses
|
102.20
|
|
|
23.14
|
|
|
342
|
|
|
84.21
|
|
|
919.14
|
|
|
(91
|
)
|
||||
G&A expenses
|
4.73
|
|
|
39.68
|
|
|
(88
|
)
|
|
5.68
|
|
|
47.34
|
|
|
(88
|
)
|
||||
Foreign exchange loss
|
0.37
|
|
|
107.37
|
|
|
(100
|
)
|
|
0.17
|
|
|
73.70
|
|
|
(100
|
)
|
||||
|
131.51
|
|
|
221.18
|
|
|
(41
|
)
|
|
118.44
|
|
|
1,088.94
|
|
|
(89
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss before income taxes
|
$
|
(43.11
|
)
|
|
$
|
(106.77
|
)
|
|
(60
|
)
|
|
$
|
(25.43
|
)
|
|
$
|
(970.06
|
)
|
|
(97
|
)
|
(1)
|
Production represents production volumes NAR adjusted for inventory changes.
|
•
|
On Block REC-T-155 (100% WI, operated), we are in the process of drilling a horizontal sidetrack oil exploration well from the 1-GTE-07-BA wellbore.
|
•
|
On Block REC-T-129 (100% WI, operated), the horizontal sidetrack oil exploration well, 1-GTE-06HP-BA. was successfully drilled. A six stage fracture stimulation was completed and based on micro seismic monitoring data, the final two fracture stages had greater fracture heights than planned and were inadvertently fracked into an a lower water bearing zone. We are currently planning to re-enter the wellbore to isolate the final two stages in order to test the shale interval.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
||||||||||
(Thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
$
|
168
|
|
|
$
|
73
|
|
|
130
|
|
|
$
|
332
|
|
|
$
|
216
|
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
DD&A expenses
|
248
|
|
|
240
|
|
|
3
|
|
|
521
|
|
|
473
|
|
|
10
|
|
||||
G&A expenses
|
4,051
|
|
|
5,941
|
|
|
(32
|
)
|
|
7,031
|
|
|
11,694
|
|
|
(40
|
)
|
||||
Foreign exchange (gain) loss
|
597
|
|
|
1,001
|
|
|
(40
|
)
|
|
522
|
|
|
1,181
|
|
|
(56
|
)
|
||||
|
4,896
|
|
|
7,182
|
|
|
(32
|
)
|
|
8,074
|
|
|
13,348
|
|
|
(40
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes
|
$
|
(4,728
|
)
|
|
$
|
(7,109
|
)
|
|
(33
|
)
|
|
$
|
(7,742
|
)
|
|
$
|
(13,132
|
)
|
|
(41
|
)
|
•
|
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, or under our credit agreement;
|
•
|
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; and
|
•
|
significant sales of shares 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: August 6, 2013
|
|
/s/ Dana Coffield
|
|
|
By: Dana Coffield
|
|
|
Chief Executive Officer and President
|
|
|
(Principal Executive Officer)
|
Date: August 6, 2013
|
|
/s/ James Rozon
|
|
|
By: James Rozon
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
Exhibit 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 February 27, 2013 (SEC File No. 000-52594).
|
|
|
|
|
4.1
|
Reference is made to Exhibits 3.1 to 3.2.
|
|
|
|
|
|
|
4.2
|
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).
|
|
|
|
|
4.3
|
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).
|
|
|
|
|
4.4
|
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).
|
|
|
|
|
10.1
|
Restricted Stock Unit Award Agreement
|
|
Filed herewith.
|
|
|
|
|
10.2
|
Option Agreement
|
|
Filed herewith.
|
|
|
|
|
10.3
|
Addendum No. 4 to the Transportation Agreement between Petrolifera Petroleum (Colombia) Ltd. and Ecopetrol S.A.
|
|
Filed herewith.
|
|
|
|
|
10.4
|
Addendum No. 4 to the Transportation Agreement between Gran Tierra Energy Colombia, Ltd. and Ecopetrol S.A.
|
|
Filed herewith.
|
|
|
|
|
31.1
|
Certification of Principal Executive Officer.
|
|
Filed herewith.
|
|
|
|
|
31.2
|
Certification of Principal Financial Officer.
|
|
Filed herewith.
|
|
|
|
|
32.1
|
Section 1350 Certifications.
|
|
Filed herewith.
|
Vesting Schedule
:
|
[The Award will vest as to one-third (1/3) of the
Restricted Stock Units annually on each anniversary of the Vesting Commencement Date, so that the Restricted Stock Units are fully vested on the third anniversary of the Vesting Commencement Date
.
Notwithstanding the foregoing, vesting shall terminate upon the Participant’s termination of Continuous Service.]
|
Issuance Schedule:
|
One share of Common Stock will be issued for each Restricted Stock Unit which vests at the time set forth in Section 4 of the Agreement.
|
•
|
Participant has received and understands and agrees to, this Restricted Stock Unit Grant Notice, the Agreement, the Plan prospectus and the Plan.
|
•
|
Participant acknowledges and agrees that this Award and any other stock awards under the Plan are voluntary and occasional and do not create any contractual or other right to receive future restricted stock units, stock awards or other benefits in lieu of future stock awards, even if similar stock awards have been granted repeatedly in the past.
|
•
|
Participant acknowledges and agrees that determinations with respect to any future stock awards, including but not limited to, the times when such stock awards are made, the number of shares of Common Stock and the performance and other conditions applied to the stock awards, will be at the sole discretion of the Board.
|
•
|
Participant acknowledges and agrees that as of the Date of Grant, this Restricted Stock Unit Grant Notice, the Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the Award and supersedes all prior oral and written agreements on that subject, with the exception of: (i) awards previously granted and delivered to you under the Plan, and (ii) if applicable to Participant, (A) the terms of any written offer letter or employment agreement entered into between the Company and Participant that specifically provides for accelerated vesting of compensatory equity awards, (B) the terms of any applicable Company change of control severance plan, and (C) any required compensation recovery provisions under applicable laws or regulations.
|
•
|
Participant consents to receive Plan documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
|
ATTACHMENTS
:
|
Restricted Stock Unit Agreement, 2007 Equity Incentive Plan
|
PARTICIPANT:
|
Your address as on file with the Company
at the time notice is given
|
Optionholder:
|
|
Date of Grant:
|
|
Vesting Commencement Date:
|
|
Number of Shares Subject to Option:
|
|
Exercise Price (Per Share):
|
|
Total Exercise Price:
|
|
Expiration Date:
|
|
•
|
Optionholder has received and understands and agrees to, this Option Grant Notice, the Option Agreement, the Plan prospectus and the Plan.
|
•
|
Optionholder acknowledges and agrees that this Option and any other stock or option awards under the Plan are voluntary and occasional and do not create any contractual or other right to receive future options, stock awards or other benefits in lieu of future option or stock awards, even if similar option or stock awards have been granted repeatedly in the past.
|
•
|
Optionholder acknowledges and agrees that determinations with respect to any future option awards, including but not limited to, the times when such option awards are made, the number of shares of Common Stock and the performance and other conditions applied to the option awards, will be at the sole discretion of the Board.
|
•
|
Optionholder acknowledges and agrees that as of the Date of Grant, this Option Grant Notice, the Option Agreement and the Plan set forth the entire understanding between Optionholder and the Company regarding this option award and supersedes all prior oral and written agreements on that subject, with the exception of: (i) awards previously granted and delivered to Optionholder under the Plan, and (ii) if applicable to Optionholder, (A) the terms of any written offer letter or employment agreement entered into between the Company and Optionholder that specifically provides for accelerated vesting of compensatory equity awards, (B) the terms of any applicable Company change of control severance plan, and (C) any required compensation recovery provisions under applicable laws or regulations.
|
•
|
Optionholder consents to receive Plan documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
|
Date of Signature
|
Bogotá D.C. the 27
th
of June of 2013
|
|
Addendum No. 4
|
Transportation Agreement VIT 005 -2012
|
|
SENDER
|
PETROLIFERA PETROLEUM (COLOMBIA) LIMITED
|
|
NIT
|
900.139.306-1
|
|
TRANSPORTER
|
CENIT TRANSPORTE Y LOGÍSTICA DE HIDROCARBUROS
S. A. S
|
|
NIT
|
900.531.210-3
|
|
PURPOSE
|
Service of transportation of liquid hydrocarbons on the Mansoyá – Orito Pipeline (OMO) Pipeline and the Trans – Andean Pipeline (OTA).
|
|
|
|
|
|
|
(1)
|
CENIT TRANSPORTE Y LOGÍSTICA DE HIDROCARBUROS S. A. S.
, hereinafter “
CENIT
”
, a Colombian mercantile company, of the type of the simplified shares’ companies, domiciled in the city of Bogotá, incorporated by private document dated on the 15
th
of June of 2012 and recorded in the commercial registry on the same date, with commercial registration number 02224959, legally represented by
JUAN PABLO OSPINA VILLEGAS
, identified with Colombian I. D. Card No. 98.542.872 issued at Envigado, acting in the name and on behalf of CENIT in his capacity as Commercial Director and General Attorney according to Public Deed No. 483 of the 8
th
of March of 2013 of the 40
th
Notary of the city of Bogotá, and
|
(2)
|
PETROLIFERA PETROLEUM (COLOMBIA) LIMITED.
a company incorporated at Cayman Islands, acting through its branch office legally established in Colombia by Public Deed No. 1682 of the 7
th
of March of de 2007 of the 6
th
Notary of the City of Bogotá, domiciled in this city, hereinafter the “
SENDER
”
, represented by
DUNCAN NIGHTINGALE
, of legal age, domiciled and resident in the city of Bogotá, identified with alien citizens card No. 391.739 issued at Bogotá and by
ALEJANDRA ESCOBAR HERRERA,
Colombian citizen, domiciled in the city of Bogotá, identified with Colombian I. D. Card No 52.646.943 de Bogotá, acting in their capacities as Legal Representatives with ample and sufficient representation powers.
|
1.
|
Whereas, the Contract, entered into by ECOPETROL S. A. (“ECOPETROL”) and the SENDER is in force, and with the amendments made to it by Addendums 1, 2 and 3, the latter dated on the 30
th
of December of 2012, was assigned by ECOPETROL to CENIT on the first day of April of 2013.
|
2.
|
Whereas, the date of expiration of the term of execution of the Contract as per the provisions of Addendum No. 3 mentioned in the preceding recital is the 30
th
of June of 2013.
|
3.
|
Whereas, the SENDER has expressed to CENIT its intention of extending the term of the Contract and CENIT has expressed to the SENDER its agreement with such extension for an additional term of two (2) months, namely until the 30
th
of August of 2013.
|
4.
|
Whereas, by virtue of the foregoing considerations, the Parties:
|
“Final Estimated Price of the Contract”
|
USD $ 21,606,000
|
Type of Guarantee
|
Total Amount
|
“
Performance Bond
|
COL $ 10,412,236,000
|
FOR THE SENDER:
|
FOR CENIT:
|
|
|||
Signature:
|
/s/ Duncan Nightingale
|
Signature:
|
/s/ Juan Pablo Ospina Villegas
|
||
Name:
|
DUNCAN NIGHTINGALE
|
Name:
|
JUAN PABLO OSPINA VILLEGAS
|
||
Position:
|
Legal Representative
C.E. 391.739
|
Position:
|
General Attorney
C.C. No. 98.542.872 of Envigado
|
Signature:
|
/s/ Alejandra Escobar Herrera
|
Name:
|
ALEJANDRA ESCOBAR HERRERA
|
Position:
|
Legal Representative
C.C. 52.646.943
|
Date of Signature
|
Bogotá D.C. the 27
th
of June of 2013
|
|
Addendum No. 3
|
Transportation Agreement VIT 001 -2012
|
|
SENDER
|
GRAN TIERRA ENERGY COLOMBIA LTD.
|
|
NIT
|
860516431-7
|
|
TRANSPORTER
|
CENIT TRANSPORTE Y LOGÍSTICA DE HIDROCARBUROS
S. A. S
|
|
NIT
|
900.531.210-3
|
|
PURPOSE
|
Service of transportation of liquid hydrocarbons on the Mansoyá – Orito Pipeline (OMO) Pipeline and the Trans – Andean Pipeline (OTA).
|
|
|
|
|
|
|
(1)
|
CENIT TRANSPORTE Y LOGÍSTICA DE HIDROCARBUROS S. A. S.
, hereinafter “
CENIT
”
, a Colombian mercantile company, of the type of the simplified shares’ companies, domiciled in the city of Bogotá, incorporated by private document dated on the 15
th
of June of 2012 and recorded in the commercial registry on the same date, with commercial registration number 02224959, legally represented by
JUAN PABLO OSPINA VILLEGAS
, identified with Colombian I. D. Card No. 98.542.872 issued at Envigado, acting in the name and on behalf of CENIT in his capacity as Commercial Director and General Attorney according to Public Deed No. 483 of the 8
th
of March of 2013 of the 40
th
Notary of the city of Bogotá, and
|
(2)
|
GRAN TIERRA ENERGY COLOMBIA LTD.
a company incorporated at United States of America, acting through its branch office legally established in Colombia by Public Deed No. 5323 of the 25
th
of October of de 1983 of the 7
th
Notary of the City of Bogotá, domiciled in this city, hereinafter the “
SENDER
”
, represented by
DUNCAN NIGHTINGALE
, of legal age, domiciled and resident in the city of Bogotá, identified with alien citizens card No. 391.739 issued at Bogotá and by
ALEJANDRA ESCOBAR HERRERA,
Colombian citizen, domiciled in the city of Bogotá, identified with Colombian I. D. Card No 52.646.943 de Bogotá, acting in their capacities as Legal Representatives with ample and sufficient representation powers.
|
1.
|
Whereas, the Contract, entered into by ECOPETROL S. A. (“ECOPETROL”) and the SENDER is in force, and with the amendments made to it by Addendums 1 and 2, the latter dated on the 30
th
of December of 2012, was assigned by ECOPETROL to CENIT on the first day of April of 2013.
|
2.
|
Whereas, the date of expiration of the term of execution of the Contract as per the provisions of Addendum No. 2 mentioned in the preceding recital is the 30
th
of June of 2013.
|
3.
|
Whereas, the SENDER has expressed to CENIT its intention of extending the term of the Contract and CENIT has expressed to the SENDER its agreement with such extension for an additional term of two (2) months, namely until the 30
th
of August of 2013.
|
4.
|
Whereas, by virtue of the foregoing considerations, the Parties:
|
“Final Estimated Price of the Contract”
|
USD $ 21,606,000
|
Type of Guarantee
|
Total Amount
|
“
Performance Bond
|
COL $ 10,412,236,000
|
FOR THE SENDER:
|
FOR CENIT:
|
|
|||
Signature:
|
/s/ Duncan Nightingale
|
Signature:
|
/s/ Juan Pablo Ospina Villegas
|
||
Name:
|
DUNCAN NIGHTINGALE
|
Name:
|
JUAN PABLO OSPINA VILLEGAS
|
||
Position:
|
Legal Representative
C.E. 391.739
|
Position:
|
General Attorney
C.C. No. 98.542.872 of Envigado
|
Signature:
|
/s/ Alejandra Escobar Herrera
|
Name:
|
ALEJANDRA ESCOBAR HERRERA
|
Position:
|
Legal Representative
C.C. 52.646.943
|
Date: August 6, 2013
|
/s/ Dana Coffield
|
|
Dana Coffield
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
Date: August 6, 2013
|
/s/ James Rozon
|
|
|
James Rozon
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
(1)
|
The Report, to which this Certification is attached as Exhibit 32.1, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Dana Coffield
|
|
/s/ James Rozon
|
Dana Coffield
|
|
James Rozon
|
Chief Executive Officer and President
|
|
Chief Financial Officer
|