Alange Energy Corp. is preparing to list its shares in the Bogota bourse in the first quarter of 2011, following in the footsteps of other oil firms listed in Canada that have tapped additional liquidity by also listing their shares in Colombia.
Alange Chairman and Chief Executive Luis Giusti, a former head of Venezuelan state-run oil giant Petroleos de Venezuela, said the shares will start trading in Bogota by the end of the first quarter of 2011. Alange, which started trading in Canada in July of last year, doesn’t plan to issue new shares but instead will allow its stock listed in Toronto to also trade in Bogota.
“Colombia has become a country where investors are very interested in oil and feel that they will have the opportunity to benefit from investing in oil companies,” Giusti said in a recent interview. “We expect significant upside,” he said.
Pacific Rubiales Energy Corp. last December became the first company cross-listed in Toronto and Bogota, and ranks as the second-largest oil producer in Colombia after state-run oil firm Ecopetrol SA. Canacol Co, a much smaller firm traded in Canada, has seen the price of Bogota-listed shares surge 68% since they started floating in Colombia in July.
“There’s a lot of investor appetite here,” Giusti said. The company will likely book a profit next year after reporting a net loss of $7.6 million in the second quarter. The company’s equity oil production in the second quarter neared 3,600 barrels per day and the company plans to close the year at 8,000 barrels of equity oil per day, Giusti said.
The company is eyeing a capital investment plan for next year which could range from a minimum of $35 million to as much as $90 million, which it plans to finance from its cash flow, he said.
Giusti, like the top management team at Pacific Rubiales, is a part of a large diaspora of Venezuelan oil men now working in Colombia after locking horns with the administration of Venezuela President Hugo Chavez. Under Chavez’s watch, PDVSA has lost autonomy and has become a source of financing for the Venezuelan leader’s socialist policies.
Oil executives from Venezuela have helped Colombia improve its heavy-oil extraction technology, one of the factors behind a production surge. Government officials expect the country’s oil output to close the year at 900,000 barrels per day and reach 1 million barrels per day next year.
Many of the top executives at Pacific Rubiales worked under Giusti when he headed PDVSA. The two companies also have some large shareholders in common, sparking speculation that Alange could eventually be purchased by Pacific Rubiales. “It’s not something that is being discussed, not that it could not happen,” Giusti said. Pacific Rubiales “has its hands full and they have very big projects right now,” he added. (Darcy Crowe / Dow Jones Newswires)