Pacific Rubiales, a Canada-based oil company whose main assets are in Colombia, reported a loss of $69.6 million in the first quarter compared with a profit of $76.1 million in that quarter of 2010.
Analysts at Colombia’s main brokerage firm InterBolsa called the results disappointing and said the company’s shares, which have fallen 21% this year on the Colombian Stock Exchange to COP49,900, might get hammered further Thursday.
In a statement Wednesday night, Pacific Rubiales said the first quarter losses were impacted by a number of non-cash items totaling $203.8 million.
It said those non-cash items were mostly from “unrealized mark-to-market losses on derivatives of $92.6 million, the equity tax in Colombia of $68.5 million fully recognized in this quarter, stock-based compensation effect of $46.7 million, and unrealized foreign exchange gain of $4 million.”
The company’s earnings before interest, taxes, depreciation and amortization, or Ebitda, was $362.5 million for the quarter, up 56% from the same quarter last year, but below InterBolsa’s forecast of $461 million.
Despite the below-forecast earnings, the company said a look back on the first quarter showed “outstanding production growth and exploratory success.”
It said average gross production in the first quarter of 2011 reached 196,272 barrels of oil equivalents, a 51% increase from that period of 2010. This is the result of the production yield from more than 61 new development wells, mainly in the Rubiales and Quifa fields, it said.
“The strategy of the company is to continue its growth through exploration, development and production of new and existing reserves and to secure market access by participating in key oil and gas transportation, and infrastructure projects,” the statement said.
Pacific Rubiales shares, which are listed in both Toronto and Bogota, began to suffer in recent months partly due to lower-than-forecast production and reserves figures.
But the share price was also dogged by the company’s announcement in March of a clause to one of its key oil contracts that, although on the books for years, was unknown to most investors. The clause is related to its participation in the Quifa contract and could have a negative impact on the company’s future earnings.