Corporate Presentation

June 2009
Corporate Presentation
July 2009
7/7/2009
1
Cautionary Statements
Statements in this presentation may contain forward-looking statements including managements assessment of
future plans, operations, expectations of future production and capital expenditures. Information concerning
reserves may also be deemed to be forward-looking statements as such estimates involve the implied assessment
that the resources described can be economically produced. These statements are based on current expectations y p p
that involve numerous risks and uncertainties, which will cause actual results to differ fromthose anticipated. These
risks include, but are not limited to: the risks of the oil and gas industry (e.g. operational risks in exploration,
development and production; potential delays or changes in plans with respect to exploration or development
projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses, and health, safety and environmental risks), fluctuation in foreign
currency exchange rates and commodity price fluctuation. As a consequence, actual results may differ materially
fromthose anticipated in the forward-looking statements. In addition, the THAI/CAPRI processes and other
technologies are early stage and future results may differ fromthose anticipated.
This presentation contains financial terms that are not considered measures under Canadian generally accepted
accounting principles (GAAP), such as funds flow fromoperations, funds flow per share, net debt and operating
netback. These measures are commonly utilized in the oil and gas industry and are considered informative for y g y
management and shareholders. Specifically, funds flow from operations and funds flow per share reflect cash
generated fromoperating activities before changes in non-cash working capital. Management considers funds flow
from operations and funds flow per share important as they help evaluate performance and demonstrate the
Companys ability to generate sufficient cash to fund future growth opportunities and repay debt. Net debt includes
bank debt plus income taxes payable plus accounts payable and accrued liabilities less cash and cash equivalents
less accounts receivable and other current assets, and is used to evaluate the Companys financial leverage.
Profitability relative to commodity prices per unit of production is demonstrated by an operating netback. Funds flow
fromoperations, funds flow per share, net debt and operating netbacks may not be comparable to those reported
by other companies nor should they be viewed as an alternative to cash flowfromoperations, net income or other
measures of financial performance calculated in accordance with GAAP.
Corporate Summary
A Platform for Growth
97.7 million common shares
C$1.2 billion market capitalization
Q12009 21 771b d Q1 2009 - 21,771 bopd
3P reserves - 55 mmbbls (12/08)
More than 80 development locations
1.9 million exploration acres in
Colombia (100% WI) and 2.6 million
in Peru (55% WI)
Long-term heavy oil potential g y p
Best in class operating team
Top decile netbacks
Strong balance sheet with $16 mm of
cash & positive working capital plus
an undrawn $80 mm credit facility
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The Colombian Advantage
Positiveinvestmentclimate(S&PratingBB+)
Newpetroleumfiscalregimewasimplementedin2004
Created ANH to act as the regulatory authority and administer new CreatedANHtoactastheregulatoryauthorityandadministernew
explorationlands
EliminatedstatebackinthroughEcopetrol
Significantlyreducedroyalties(8%forpoolsupto5,000bbl/d)
Reducingcorporatetaxratesto33%in2008
Over252contractssignedsinceANHwasformed
Over70oil&gascompaniesnowoperatinginColombia
96 new field wildcats drilled in 2008 and 120 are expected to 96newfieldwildcatsdrilledin2008and120areexpectedto
bedrilledin2009
Thesituationofourneighbors,especiallycountriessuchasVenezuela,BoliviaandEcuador
haveannouncedorhavestartedtonationalizeforeigncompanies,whichresultsto
Colombiasbenefit,becausethejudicialstabilitythatourcountryoffersissynonymousto
investorconfidence.Colombiahasneverbrokenasignedcontractnorhasitunilaterally
modifiedcontracts,andthisprovidesaguaranteetothecompanies,bothnationaland
international,andistakenintoconsiderationatthemomentofinvesting.Itisanassetthat
wemustpreserveMinisterofMinesandEnergy,Hernn Martnez Torres
Production History
Corcel Discovery Fueling Production Growth
Production by Quarter
25,000
10,000
15,000
20,000
b
o
p
d
0
5,000
2003 2004 2005 2006 2007 2008 2009
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3
Reserves
50
60
20
30
40
50
s
s

W
o
r
k
i
n
g

I
n
t
e
r
e
s
t

(
m
m
b
b
l
)
POSSIBLE
PROBABLE
PROVED
UNDEVELOPED
Reserves estimated by our independent reserves evaluators DeGolyer and MacNaugthon (D&M)
-
10
Dec. 31,2004 Dec. 31,2005 March 31,2006 Dec. 31,2006 Dec. 31,2007 Dec. 31, 2008
G
r
o
s
PROVED
DEVELOPED
PRODUCING
NPV 10% Before Tax
1,800
2,000
600
800
1,000
1,200
1,400
1,600
$
U
S

m
i
l
l
i
o
n
s
POSSIBLE
PROBABLE
Based on independent external reserves evaluations
-
200
400
Dec. 31,2004 Dec. 31,2005 March 31,2006 Dec. 31,2006 Dec. 31,2007 Dec. 31, 2008
PROVED
UNDEVELOPED
PROVED
DEVELOPED
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4
Q1 2009 Highlights
High Value Production
Wellhead price differential
Average WTI price US$43.08
Production of 21,771 bopd up
Wellhead price differential
$9.29
Royalties $3.67 (10.9%)
Production costs $5.92
152% from Q1 2008 and up
42% from Q4 2008
Funds flow from operations only
down 7% from Q1 2008 to $41.8
million, despite a 56% drop in
WTI crude oil prices
O i i d4 %
Operating netback $24.20
Operating costs improved 45%
year over year
Strong operating netbacks of
$24.20/bbl
Colombian Assets
Production, Exploration & Heavy Oil
Petrominerales is one of Colombias Largest Land Holders
Low risk development p
High-impact exploration
opportunities
Applying Canadian technical
concepts
Proven success in new play
fairways & new play types
Largest producer from new
ANH contracts ANH contracts
Rapid conversion of
exploration success to
production
Significant heavy oil potential
THAI
TM
applicability
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5
Neiva
Applying New Technologies to a Proven Field
Executing infill drilling program
17 Doima locations
19 Honda locations
29 recompletion candidates
Applying multi-stage fracture
stimulation technology
Now producing ~2,500 bopd, more
than 5 times 2008 levels
Orito Caballos Formation
Drilling Locations
Existing Caballos wells
43 D&M locations at 12/08
13 additional PMG locations
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6
Corcel
A New Exploration Trend
Corcel
Long-term Exploration & Development Potential
Corcel-E1
Corcel-F1 Corcel-G
Corcel-C1
Corcel-B1
Corcel-D1
Corcel-D3
Corcel-C3
Corcel-A3
Corcel-A2
Corcel-A1
Corcel-D2
Corcel-A4
2009 WELLS
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Corcel Production Facilities
Low Cost Operator
Monterrey Offloading Facility
Strategic Infrastructure
Secures key offloading capacity in the basin
77 km from Corcel, significantly reduces trucking costs
Further increases already high operating netbacks
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Basin Comparison
Deep Llanos Basin
High Impact Potential on Trend with Super
Giant Fields
439,872 contiguous acres
1,315 km of existing 2D on Blocks 25 & 31
Block 31 well possible re-entry candidate
Block 25 commitment - 141 km
2
3D +1 well
Block 31 commitment - 143 km
2
3D +2 wells
3-year first phase terms on Blocks 25 & 31
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Llanos Plains Exploration
Colombias Most Prospective Basin
571,380 acres
High-impact light oil
explorationopportunities exploration opportunities
New discoveries at Mapache
Extensive 2D & 3D seismic
coverage
Continue to acquire high
quality 3D seismic data as an
exploration tool
Plan to drill at least 5 new
exploration wells in 2010
Mapache Discoveries
20093D
20083D
Converting Exploration Success to Production
Mapache1
MAPACHE
BLOCK
Mirasol1
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Peru - Block 126
Ucayali Basin
Excellent fiscal regime
5% royalty
30% tax rate %
Ucayali Basin
650 km long & 250 km wide
16,000 foot sedimentary column
Multiple source rocks and reservoirs
Excellent prospectivity
Highly underexplored
Four large pools discovered to-date
Block 126 2 6 mmacres (55%WI)
Pulcallpa
[Staging Area]
Block 126
Block 126 - 2.6 mm acres (55% WI)
Existing infrastructure
Road, airstrip, pier
Over 1,000 km. of reprocessed 2D seismic
La Colpa 1X well tested oil
Initially plan to acquire 150 km
2
of
3D seismic before 12/2010
Lima
Gas
Oil
Existing Pipelines
Llanos Basin Exploration
Long-term Heavy Oil Potential
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11
Heavy Oil SA-13 Well
Core Showing Oil Stained Carbonera (4,826ft)
THAI
TM
Unlocking the Potential of Heavy Oil
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12
THAI
TM
Benefits
Unlocking the Potential of Heavy Oil
Higherrecoveryrates:7080%ofoilinplace
Improved economics Improvedeconomics
Lowercapitalcost:fewerwells,nosteam&waterhandlingfacilities
Loweroperatingcost:negligiblenaturalgas&minimalwater
handling
Highernetbacksforpartiallyupgradedproduct
Fasterprojectexecutiontime
Energyselfsufficient generatepowerfromproducedgas
Lowerenvironmentalimpact
Smallersurfacefootprint
Minimalwateruse
Partiallyupgradedoilrequireslessrefining
50%lessgreenhousegasemissions,CO
2
captureready
THAI
TM
Commercial Design
Compact Centralized Surface Facilities
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13
Heavy Oil Bid Round
Winning Bids
Chiguiro Oeste
Chiguiro Este
BLOCK OPERATOR Additional
Royalty (%)
Rio Ariari
Chiguiro Este
Petrominerales Blocks
Royalty (%)
CPO2 PLUSPETROL 25
CPO3 PLUSPETROL 25
CPO4 SK ENERGY 31
CPO5 TECPETROL 39
CPO6 ONGC VIDESH 23
CPO7 TECPETROL 47
CPO8 ECOPETROL 24
CPO9 TALISMAN 17
CPO10 ECOPETROL 20
CPO11 ECOPETROL 19
CPO12 METAPETROLEUM 28
CPO13 TECPETROL 32
CPO14 METAPETROLEUM 2
CPO17 HOCOL 12
Petrominerales Strength
Long-Term Growth Platform
Producing assets and reserves*
Q1 2009 21,771 bopd
Reserves - 55.0 mmbbls 3P, 36.8 mmbbls 2P,
25.2 mmbbls proved
More than 80 development locations
Major discovery at Corcel
Excellent early results at Neiva and Mapache
Exploration - 1.9 million acres in Colombia
(100% WI) & 2.6 million in Peru (55% WI)
Hi h i t l ti t iti
Significant Heavy Oil
Potential
High-Impact Exploration
Extensive Development
D illi I t
* All reserves (as at 12/31/08 per DeGolyer & MacNaughton (D&M)) and production figures are working interest to Petrominerales before royalties
Heavy oil potential
3 heavy oil blocks - 0.8 million acres
Over 15 prospects, drilling first 3 heavy oil
exploration wells
THAI
TM
technology licensing agreement
High-impact exploration opportunities
Drilling Inventory
High-Value Production
Base
7/7/2009
14
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