Vetra: A Colombian story

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...

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Apache's Egyptian Jewel

Apache entered Egypt in 1994 and has since built up a dominant onshore position through a series of acquisitions and an aggressive exploration campaign. It is the largest acreage holder in the Western Desert and operates 24 licences. In 2010, Apache expanded its position through the acquisition of BP’s entire Western Desert portfolio as part of a wider transaction involving BP’s North American assets. In 2013, Apache divested 33.3% of its Egyptian...

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Pricing Kenyan crude

The price a crude fetches is typically against a benchmark such as Brent, WTI or Urals and the underlying crude marketing agreement will detail the calculation of the premium or discount to such a benchmark as well as other adjustments. As Kenyan crude has never been marketed before, there is no established pricing for Lokichar crude – however, a hypothetical value can be calculated. One of the key determinants of crude pricing is crude quality...

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Battle of the routes

Significant resources have been discovered in East Africa with 1.7bnbbl lying in Uganda and 600mmbbl in Kenya. The key barrier to monetising the vast amounts of oil is an export pipeline. In 2010, when Tullow acquired Heritage’s acreage, first oil was envisaged for 2016. Over the last five years, this timing has slowly crept back with estimates now pushed back to late-2019 despite government PR continuing to promote first oil in 2016-17. There...

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Gran Tierra's little pain

Gran Tierra is a TSX and NYSE listed E&P with a focus on Colombia. Its main assets are the Costayaco and Moqueta fields in the Putumayo Basin which accounted for 88% of the company’s Colombian NAR production of 18.4mboe/d in 2014. The company also has an exploration portfolio in Brazil (supported by minimal production of 900bbl/d NAR in 2014) and Peru. In March 2015, Gran Tierra announced that it was suspending development operations on...

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Oil price contingent payment: Bridging the valuation gap in an uncertain oil price environment

In the current oil price environment, buyer-seller alignment on valuation is likely to be an issue with differences driven by view on the oil price outlook. A number of transactions have stalled or been pulled over the last year. One possible way to bridge this gap is to have a contingent consideration element that is contingent on the recovery of the oil price; the seller benefits from recovery in the oil price if it believes a recovery is...

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Iran interim agreement: the Minotaur's labyrinth

In the story of the Minotaur, Daedalus was tasked with building a labyrinth under the order of King Minos of Crete to imprison the dreaded creature. The Minotaur, part man part bull, was an unnatural being. He was created when Pasiphae, King Minos’ wife mated with the bull sent by Poseidon; this was made possible by the wooden cow crafted by Daedalus into which Pasiphae climbed into. The Iran framework agreement, is in some respects like the...

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