RayJay only carried $0.01 on that well. See below.
Successful appraisal wells at Las Maracas and Balay; Dry hole at
PetroAmerica released an operations update, reporting the Las Maracas-7 well
encountered net pay in the Mirador, main Gacheta and basal Gacheta sands.
Additionally, the Balay-4 well was successfully completed and anticipated to be
brought on using an electro-submersible pump (ESP). On the exploration front,
the company reported the Altillo Oeste-1 well was dry.
We maintain an Outperform rating and C$0.45 target price.
Las Maracas-7, which was drilled 400 m south of Las Maracas-6, successfully
confirms the southern extension of the Las Maracas field. It is expected to be
completed as a Gacheta producer. Current Las Maracas gross field production
is 8,500 bbl/d (4,250 bbl/d net to PTA) – generally in-line with our estimates.
Balay-4 was also completed, and is anticipated to be brought on as a
commercial producer using an electro-submersible pump (ESP). The well tested
from the Upper Mirador sands at stabilized rates of 544 bbl/d (82 bbl/d net to
PTA) of 28° API oil under natural flow.The Altillo Oeste-1 exploration well on the CPO-1 block was plugged and abandoned after encountering only minor oil shows. The well had been
estimated to cost $3.7 mln net to PTA. In light of these results, we have
adjusted our NAV; however, we had only carried the well at $0.01/share in our
risked contingent NAV; therefore the impact was minimal. The company and its
partner, Pacific Rubiales, may enter into the second exploration phase to drill
another exploration well prior to the end of 2013. PetroAmerica holds a 50%
WI on the block.
Our valuation reflects a 50:50 weighting to our YE-2013E risked contingent NAV
of C$0.45/share (Exhibit 1) and an unchanged 3x 2014 CF multiple. The CF
multiple falls slightly below the average applied multiple for the international
producer group of 3.5x and in our view, is justified given the company’s
projected 4-year RLI and forecasted 2012/2013 production growth of 270%.