What were the highlights of 2011 for PetroMagdalena? What initiatives do you have in place for 2012?

BRANGER: It’s an exciting year for us here in Colombia. We are one of the most exciting junior companies around. We had a difficult year last year, but we had a turnaround story and we now have new management coming in. The good news is that we've doubled our reserves in 2011 and we've also doubled our production in 2011. Our initiatives for this year include an interesting development program; we have 10 or 11 development wells to be drilled, from Q2 onward.

What challenges have energy companies faced when doing business in Colombia?

BRANGER: One of the challenges we’ve faced has been more bureaucratic than anything else. There has been a delay in terms of licenses and approvals for many things. However, I think that is a normal process of growth. This country has experienced explosive growth in the sector over the last few years and obviously that has overwhelmed some of the institutions that were responsible for environmental licenses and other such permits that the Government has to approve, such as transfer of properties or what have you. As time goes on, the Government is becoming more conscious of that and hopefully those small glitches that still remain will be corrected in the very near future.

What is your overall outlook for the energy sector in Colombia?

BRANGER: Colombia has been a success story in the sense that it has attracted massive amounts of capital in the last few years, particularly in the oil and gas and mining sectors. We believe that the improvement in the security sector has been the catalyst for this increase in capital. Most of the exploration being done has been done in areas that, for the past 5 years or so, were not accessible to most international companies. I think that has been a tremendous success story for the country and I believe it will continue to be so. We recently heard announcements from the main guerrilla group that they have vowed to stop kidnapping for economic reasons and to free the last soldiers and policeman they have in custody; this should happen relatively soon. We've seen how the envelope began in the Llanos and then went on to the south of the country in the Putumayo area and we’re hopeful that the last frontier of this development will be in Catatumbo, which is where we have some very prospective blocks. It's potentially a very rich region; it’s on the border with Venezuela and part of the Maracaibo Basin area, which is one of the richest areas in the continent.  We therefore feel very excited as far as the prospects in that region are concerned.

Our optimism is also based on the strength of Colombia’s banking sector, and their recognition of what the oil industry means to this country. The banking sector in this country has been very solid and very successful. I believe that oil has become part of the growth of the country and has allowed for the involvement of many companies from abroad in the Colombian economy. The opening up of the banking sector presents great opportunities locally as compared with the past where you had to raise capital outside. This was a result of the fact that the oil industry was new to this country and didn’t present as many opportunities to the local banking sector.  That has changed and is continuing to change quite rapidly. As far as the Government is concerned, I think it recognizes that the oil and gas sector is one of the locomotives for growth and prosperity in this country. The oil and gas sector has been very active in terms of promoting social alternatives for growth in certain sectors that were out of reach from what the central Government was providing for many of these communities. I think that the oil and gas industry is working hand in hand with many communities to facilitate progress and prosperity.

What was the root cause of the low share price valuations seen in 2011 for numerous Colombian companies?

BRANGER: Last year was a particularly hard year for Colombia. I think that it implied a change in Government and it implied some teething problems of the new Government in terms of grasping some of the problems of the industry. There were some issues with the elections that occurred last October and other issues with blockades and protesters. Protesters were making their voices heard particularly because of the change in the way the royalties were being distributed and how the royalties were taken away from municipalities directly. I think that those issues affected the perception of the value of Colombia. If you saw Colombia last year, the average share price was much lower than what companies in the market would have had, had they been located in a different zip code. I think that it was obvious that the discount in Colombian companies had a lot to do with this perception. Additionally, there was a problem with financing last year for many of the junior companies. I believe this year these factors will be reversed due to the successes that you’ll see in terms of increased reserves and the successes within the country itself. Our company has a very important target, not only in terms of increasing production to just above a million barrels, but also in terms of increasing production reserves. I think that much of the effort you will see in this country will be focused towards reserves.