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1/29/15

Catching up with Pacific Rubiales (PRE.to)

As of today, Pacific Rubiales (PRE.to) is a sub-$1Bn market cap company. Canadian dollars at that.



And the reason, aside from the obvious about the oil drop, is that the word inside Colombia's financial zone is that Ecopetrol is indeed going to take back its Rubiales field next year instead of continuing the JV with PRE.to, as is ECO's right under the deal. And that means PRE loses its cheapest and most important production field. And that means in 2016, its costs per barrel shoot higher than anything it sketches in its current 2015 guidance. And that means it won't have the moolah to service correctly this table of wonderful money numbers*.




And that means that if oil prices don't pop back up, this show is over. 


Bottom line, this company isn't an investment any longer, it's a gamble.



*The PRE.to 3q14 balanace