LONDON (Alliance News) - Andes Energia PLC Thursday said its total production has increased after acquiring a 51% stake in Interoil Exploration and Production ASA in January.
In January, Andes Energia acquired a 51% stake in Interoil by investing NOK36.3 million in a private placement, triggering a mandatory offer for the remaining existing shares in Interoil for NOK0.11 per share, a transaction which has not yet been completed.
After acquiring the stake, the company said its total production now stands at 3,300 barrels of oil equivalent per day. That includes 1,800 barrels of oil equivalent per day from its assets in Argentina, and 1,500 barrels of oil equivalent per day from Colombia.
Interoil operates production and exploration oil and gas licenses in Columbia.
Andes Energia said it achieved an average price of USD77 per barrel in Argentina year to date, and USD47 per barrel from production in Colombia. The company said that there is a regulated oil price in Argentina which is structured to "maintain a stable price in the domestic market" to allow companies to maintain cashflows and encourage profitable development.
Over half of Andes Energia's total production is sold in Argentina.
"In addition, we have four discoveries to date in the Vaca Muerta and are producing oil from one of those discoveries under natural flow. We see the current low international oil price environment as an opportunity to grow responsibly and sustainably," said Chief Executive Alejandro Jotayan.
In December, the company made a discovery in the Vaca Muerta in the Vega Grande license, which has led to "continuous production from the shale play, transforming Andes into one of the few shale producers in Argentina," it said.
It also said it has drilled one or two development wells per month with its partner on the Chachahuen field in Argentina over the last year, costing around USD1.1 million per well, of which around USD220,000 was paid by Andes. To date, 60 wells have been drilled and contribute 760 barrels a day to Andes total production.
"The development plan in Chachahuen has delivered outstanding results, encouraging the partnership to commit to an additional 100 wells, for which Andes is fully funded," it said.
Andes Energia also said it has secured USD10 million of new debt from Macquarie Capital and Mercuria in the last three months, which will allow the company to "finance its organic and inorganic growth strategy".
Andes Energia shares were up 2.8% to 28.00 pence per share on Thursday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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