Why Colombia
Colombia is Relatively Unexplored
- National and mid-cap oil companies controlled E&P activities until recently, with low number of wells drilled per year
- Application of “off the shelf” ideas and technologies such as 3D seismic, directional drilling and water flooding is providing outstanding success rates, particularly in onshore basins of Colombia
- Colombia has a fairly well developed oil and gas infrastructure with excess capacity due to declining oil reserves and production, and export capacity with two Caribbean port facilities
- Oil and Gas regulator ANH has recently announced a new competitive process to assign small oil fields to small-cap qualified operators
Attractive Fiscal Terms, Political and Economic Stability
- Solid, Long Term and Stable E&P contracts
- Low royalties (8% up to 5000 bopd per field, increasing on a sliding scale up to 25% for a field producing at 100,000 - 600,000 bopd)
- Higher Brent oil prices, with a $2-$5/bbl differential
- Oil and Gas constitutes over 20% of country‘s exports
- Income tax rate of 30 - 33%
- Growing economy (2% - 4% per year)
- Stable legal systems, strong democratic political tradition
- Standard and Poor’s credit rating BB+, Moody’s Ba1
- Possibly the best fiscal regime in the world for small oil fields
Colombia is an Active M&A Market
- Significant advantage and attractive deal making opportunities for established/known management teams with proven track records and recognized technical expertise in the Colombian oil & gas industry
- Existing mid-cap sector provides attractive exit for Juniors by consolidation