UPDATED TO REFLECT PACIFIC RUBIALES COMMENT
I hate to keep picking on this one company. But reader RR points us to an interview with Pacific Rubiales CEO Ronald Pantin in the Colombian magazine Semana:
La producción en 2010 creció casi un 80 por ciento, al pasar de 122.000 a 193.000 barriles.
In translation: “Production in 2010 grew almost 80 percent, to go from 122,000 to 193,000 barrels.”
A couple problems here. First, in the Bloomberg transcript of the company’s earnings conference call a month ago, the same guy said year-end oil production was 183,000 barrels a day, not 193,000. It’s possible that either Bloomberg or Semana misquoted him, and maybe he’s being consistent. I’d love to know: I called to ask about these numbers, and no one was available to comment at the company’s offices in Toronto. I called the offices in Bogota but was transferred four times to people who didn’t comment. Then the line died. When I called Bogota again, the line cut off without being answered. I sent an e-mail to the company’s investor relations officer and am awaiting a reply.
The company wrote back and said Pantin gave 193,000 on the conference call, and my transcript was incorrect. My apologies to readers for relying on inaccurate information. And thanks to the company for getting back to me.
The second error is harder to explain away. Pantin says output increased 80%. Sorry, dude, but no. The company wanted an 80% increase. That was the goal. Output grew
50% if you believe Bloomberg or 57%, if this 193,000 number is right.
Now, all this doesn’t matter all that much, right? The company keeps pumping more and more oil and making more and more money, which is good for shareholders. As someone who is unlikely ever to go long or short PRE.to stock, I don’t really need to care about these corporate governance and communications errors. But here’s the thing. Oilfield, pipeline and refinery operations require people to be fastidious with their arithmetic (and calculus, for that matter). Carelessness in the oil industry can punish not just the company or its shareholders, but the entire world — as the Deepwater Horizon disaster reminded us. Pacific Rubiales has graduated from being a little company poking holes in the ground to being a significant oil company that’s looking to expand. It’s important for everyone that the company be detail-oriented. And since we can’t count on the local press to hold the company’s facts up to scrutiny, the job falls to some dude on the intertubes.