Vetra Energia is a private
Colombian based E&P with a sole focus on Colombia.
Its main asset is a
69.5% operated interest in the Sur Oriente block; Petroamerica is the partner
on the block with 30.5% WI which it acquired through the merger with Suroco in
2014. Vetra Energia also has a 100% WI in the La Punta block and a 60% operated
interest in VMM2 (40% Canacol) which contains the Mono Araña field.
In July 2013, Vetra
Energia was acquired by a consortium led by ACON Investments and Capital International.
The Vetra management team, along with private investors including oil & gas
veteran Atul Gupta also participated in the acquisition. The Vetra management
team and private investors participated through a vehicle called New VEG.
Vetra Holdings SARL
was incorporated for the acquisition of Vetra Energia and is owned by the consortium
members. Based on the company’s filings, the acquisition consideration is
estimated to be c.USD440mm. This has largely been funded through pseudo-debt
with USD265mm of Preferred Equity Certificates (“PECs”) issued to the
consortium members and USD187mm of promissory notes issued to Vetra’s selling
shareholders. The PECs carry no interest whereas the promissory notes carry a
rate of 10% per annum.
In 2013, Vetra produced
5.6mmbbl or 15.4mbbl/d. However, latest filings with the ANH show that
production had plummeted to 6mbbl/d in2014 suggesting that the consortium may
have significantly overpaid for the acquisition. This view is supported by the valuation
of the assets from public sources:
- Broker consensus read-through valuations of $92mm for Sur Oriente and <$1mm for the other assets
- Wood Mackenzie valuation of $63mm for Sur Oriente and <$1mm for the other assets
- Furthermore, Petroamerica recorded a write-down of $30.4mm on Sur Oriente in 2014
Sur Oriente is Vetra’s
main asset and is located in the Putumayo Basin. It is owned through Consorcio
Colombia Energy (“CCE”) in which Vetra holds a 69.5% interest and Petroamerica
30.5% interest. CCE holds a Crude Incremental Production Contract with
Ecopetrol on Sur Oriente which entitles Ecopetrol a share of the block’s
production which is determined by an R-factor. Petroamerica’s disclosure notes
that Ecopetrol is entitled to 52% of production; the remaining 48% of
production is shared between Vetra and Petroamerica per their interests in CCE.
The block produces from three fields (Pinuna-Quillacinga,
Cohembi and Quinde) and in 2014, gross production was c.14.3mbbl/d from six
wells.
Production from Sur
Oriente was historically trucked to the nearby Orito facilities and then exported
via the Trans-Andean Pipeline (“OTA”) to the port of Tumaco on the Pacific
coast where it is sold as the Colombian South Blend. In November 2014, a new
export route was established for the Cohembi and Quinde fields with crude
trucked to the Amazonas Station in Ecuador and transported through the Oleoducto
de Crudos Pesados (“OCP”) pipeline which is expected to result in $8-10/bbl
improvement in netbacks over time.
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| Pipeline export routes from Putumayo Source: Petroamerica January 2015 corporate presentation |
