Shares in PetroLatina (LON:PELE) fell 6% in morning trade after the company lost a project in Colombia.
The Agencia Nacional de Hidrocarburos (ANH) has reversed its previous decision to award block LLA57 in the Llanos basin to PetroLatina and handed it over to a third party.
PetroLatina said that it still held the rights to block VMM28 in the Middle Magdalena basin immediately adjacent to its La Paloma block.
ANH announced in late June that PetroLatina was the highest bidder for blocks VMM28 and LLA57.
The awards were made subject to the finalisation and signature of formal exploration and production contracts with the ANH.
However, PetroLatina was later notified of a conflicting claim over he LLA57 block raised by Parex Resources, an under bidder, which has been under evaluation by the ANH and an external consultant. An appeal made by Petrolatina to contest the award was rejected by ANH.
PetroLatina pledged to bid for new acreage in the Llanos basin in forthcoming bidding rounds to fulfill its goal of gaining representation in all three of the most prolific basins in Colombia namely Middle Magdalena, Putumayo and Llanos.
“It is clearly disappointing to have been unsuccessful in our bid for LLA57.
“Despite this, the award of VMM28 in the Middle Magdalena basin represents an exciting opportunity.
“The award of this block represents a continuation of our strategy to build a large and profitable area of core licence interests in the Middle Magdalena basin,” said chief executive of PetroLatina Juan Carlos Rodriguez.
The company now has five contiguous blocks in the area.
The block located immediately to the north was awarded to Royal Dutch Shell (LON:RDSB), with which PetroLatina has held technical discussions to further understand the potential opportunity of the basin.
PetroLatina expects to finalise and sign the formal exploration and production contracts for block VMM28 with the ANH during the fourth quarter of this year.