LatAmNRG Prospector: Week 26 2019

LATAMNRG PROSPECTOR VOL 26 2019

ANH Colombia Says 10 Oil Blocks Have Been Allocated

LatAmNRG Heard On The Street: Gas Markets, Argentina Tender

Talos Energy Completes Zama Appraisal Program

Tullow Eyes Two Guyana Exploration Wells In 2H:19 Moody’s Assigns B2 Rating To YPF’s Proposed 2029 Notes

Mexico Open Season Q&A: GMEC’s Monroy And Baker Institute’s Duhalt Weigh In

GeoPark Expands In the Llanos Basin In Colombia

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

Energy Analytics Institute’s weekly LatAmNRG prospector and select highlights from the week. Read the full stories online 24/7 at www.energy-analytics-institute.org

ABOUT US

LATAM HEARD ON THE STREET LatAmNRG Heard On The Street: Gas Markets, Argentina Tender (Energy Analytics Institute, Aaron Simonsky and Ian Silverman, 25.Jun.2019) — Heard on the street related to the Latin America and Caribbean upstream, midstream, downstream and renewable energies sectors.

ARGENTINA — During the first half of July a tender will be launched in Argentina for the construction of a new natural gas pipeline that will increase Vaca Muerta gas evacuation capacity, Argentina’s Energy Secretariat Gustavo Lopetegui said 14 June in an official statement.

Energy Analytics Institute (EAI) is a Houston-based private organization focused on provided integrated services related to the Latin American and Caribbean upstream, downstream, midstream and renewable energy sectors.

— Echo Energy reports progress on the western cube last week, saying acquisition is now 90% complete, the company announced this week via Twitter.

I. EAI’s primary focus related to the Latin American and Caribbean petroleum sectors is to assist businesses establish and nurture relationships with other businesses or consumers by facilitating integrated business-to-business (B2B) and business-to-consumer (B2C) solutions.

— Neo Lithium Corp. says PB1-R-25 yielded an average of 1,117 mg/L Lithium, 11,319 mg/L K, Mg/Li=1.59 and SO4/Li=0.1 over 178 m from 87 to 265m depth. Drill result validate additional high-grade lithium brine below the area in Argentina where the resource and reserve was defined in the PFS to only 10 metres in depth, Neo said in a statement.

II. EAI also organizes timely forums, seminars or executive speaking engagements related to the Latin American and Caribbean petroleum sector covering topics relevant to the upstream, midstream, downstream and renewable enegy sectors.

III. EAI also provides unbiased breaking news, among project updates, related to the Latin American and Caribbean petroleum sectors covering countries small and big from Jamaica and Trinidad and Tobago in the Caribbean to Guyana, Bolivia and Peru in South America and bigger regional players including Mexico, Colombia, Venezuela, Brazil and Argentina.

CONTACT / FOLLOW US: E. news@energy-analytics-institute.org E. webmaster@energy-analytics-institute.org W. www.energy-analytics-institute.org

BOLIVIA — Bolivia will soon have new markets in Brazil, Argentina, Peru and Paraguay, Bolivia’s Hydrocarbons Minister Luis Alberto Sánchez said 17 June during the Bolivian television program ‘El Pueblo Es Noticia.’

— Bolivia’s economy expected to growh 4.5% in 2019, La Razón reported, citing the country’s Vice Minister of Budgets Jaime Durán.

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

— Bolivia continues to move forward with urea and LPG sales to Paraguay, Brazil, Argentina and Peru, ABI says.

REGION GAS MARKET

ECUADOR

The natural gas market in the Latin America and Caribbean region remains attractive, a source covering the region tells Energy Analytics Institute.

— EP Petroecuador has recycled 313,558 plastic bottles using the Tritubot system inaugurated on 8 February 2019 — Ecuador’s new Hydrocarbons Vice Minister Juan Carlos Bermeo Calderón “The richness and variety of GeoPark’s deep organic project inventory, over our expansive Latin American platform, provides multiple upside growth drivers and secures downside protection across this big, exciting, underexplored continent.”

– GeoPark Limited Chief Executive Officer James F. Park said 3 June in an official company statement.

MEXICO — Mexico’s Energy Secretariat Rocio Nahle says revamp of Pemex’s six refineries to be finished by mid-2020, SENER says via Twitter.

“The Dos Bocas Refinery will mark the beginning of the recovery of national security, through the full exercise of sovereignty over our energy resources, especially our oil.”

– Pemex General Director Octavio Romero Oropeza said 2 June in an official company statement.

— Mexico’s President Andrés Manuel López Obrador says Ixachi field to produce 80,000 b/d of light oil and more than 600 MMcf/d of natural gas by 2022, up from 3,900 b/d and 30 MMcf/d, respectively.

— The deepwater projects are longer term and possibly outside of what AMLO and his administration can do while in office, thus, why they are not showing as much interest in them as the political benefit declines.

VENEZUELA — Venezuela’s supplies of gasoline are trending extremely low and it is rumored the OPEC member country has enough supply to only last it another month or so.

— PDVSA’s hydrodesulphurizing plant 3 (HDAY3) at its Amuay refinery is back on line, as of 13 June, the company said in a statement.

What follows are excerpts from our conversation: — Some operators have a unique gas position in terms of potential but bringing production online and in a timely manner may still produce a deficit in supply over the medium term, the source says.

— Trinidad’s market has eroded significantly because of pressure from US LNG, which is notably cheaper. Looking at the larger and historic export markets (Spain, Brazil, Argentina and Chile) much of this demand over the next several years will be satisfied by US LNG (Spain) or domestic production/regional piped trade, the source says.

— Investment is still needed in Brazil and Argentina in terms of infrastructure projects to bring online pre-salt associated gas in Brazil and similarly assisting to send Vaca Muerta gas to Buenos Aires/Rosario as well as being able to store gas to meet seasonal demand. Chile now importing piped gas from Argentina helps alleviate their LNG needs but not entirely, the source says.

— In terms of spot cargo prices US LNG is probably the most competitive source out there just now both in terms of feedstock volume and price. As more infrastructure projects get the green light bringing Permian gas to the Gulf Coast. Spot prices could fall even further. In short there is probably no destination in Latam/Caribbean that won’t look to US LNG to be their main supplier, the source says.

— Moving gas from Peru LNG through the Panama Canal to get to the regasification terminal in Cartagena is attractive but would increase cost from a time and money perspective. The real prize for Peru LNG is of course their ‘proximity’ to the Asia markets which is something that US LNG probably won’t be able to compete with due to the location of the liquefaction plants as they exist just now (although the East Asian market is heavily oversupplied and contract volumes have been locked in over the next decade from other sources), the sources says

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

Showcase Your Brand In The eProspector

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

ARGENTINA ENRE Fines Edesur $278.2mn Related To Electrical Safety (Energy Analytics Institute, Aaron Simonsky, 25.Jun.2019) — Argentina’s regulator of electric services or ENRE fined Edesur $278.2 million for “anomalies” related to electrical safety along public highways.

ENRE ordered the sanction for reported defaults that were verified between July and September of 2017, reported online media Clarín.

During that period, ENRE supervised the concessions of Edenor and Edesur, which provide electricity distribution services in Buenos Aires and suburbs.

Sometime this year, control of these concessions will be transferred to an entity that will include the city and province of Buenos Aires, the media reported.

U.S. Judge Sets Audience For 11 July 2019 (Energy Analytics Institute, Aaron Simonsky, 25.Jun.2019) — Lawyers defending Argentina and Burford Capital faced off in the court of Judge Loretta Preska in the first official trail appointment related to the nationalization of YPF since the Supreme Court declined Argentina’s request seeking to annul the suit in the U.S. Supreme Court of Justice, reported online media La Nación.

Following the decision of the court, lawyers for Argentina from the firm Skadden, Arps, Slate, Meagher & Flom, and for YPF from the law firm Cravath, Swaine & Moore, submitted two separate briefs in which they anticipated new arguments. Lawyers had thought Judge Preska would dismiss the suit; thus, allowing the trial to continue in Argentina.

Vaca Muerta Finally Produces Oil, 100 Years Later (Bloomberg, Jonathan Gilbert, 25.Jun.2019) — Along the western edge of Argentina’s Patagonia, on an arid steppe nestled against the Andes mountains, lies a shale formation known as the Vaca Muerta.

And ever since engineers confirmed what an American geologist suspected a century ago — that the Vaca Muerta, or dead cow, contains massive amounts of oil and gas — the rush to replicate the U.S. fracking boom was on.

First came YPF SA, the local oil giant, and Chevron Corp.

Then the likes of Total SA and Royal Dutch Shell Plc. Between them, they poured some $13 billion into exploration over the past eight years. None of them ever had much to show for it, though. Obstacles kept popping up, and production was marginal.

Moody’s Assigns B2 Rating To YPF’s Proposed 2029 Notes (Moody’s 24.Jun.2019) — Moody’s Investors Service has assigned a B2 rating to YPF Sociedad Anonima’s (YPF) proposed senior unsecured notes due 2029. The issuance volume will be in line with benchmark size. The outlook is stable.

Net proceeds from the proposed issuance will be used for liability management, capital spending and working capital requirements.

The rating of the proposed notes assumes that the final transaction documents will not be materially different from draft legal documentation reviewed by Moody’s to date and assume that these agreements are legally valid, binding and enforceable.

Preska established a 3 July deadline for Burford and Argentina for which both parties could present their arguments in writing, and summoned the audience for 11 July at 11 a.m.

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

BRAZIL

241,340,371 common shares, without par value,of Petrobras (“Common Shares”), including 69,302,000Common Shares in the form of American Depositary Shares (“Common ADSs”).

Petrobras’ Teasers For Downstream Assets In Brazil

The global offering consists of (i) and international offering of Common Shares and Common ADSs in the United States and other countries outside Brazil, which was registered with the U.S. Securities and Exchange Commission (SEC), and (ii) a concurrent public offering of Common Shares in Brazil.

(Petrobras, 28.Jun.2019) — Petrobras, following up on the release issued on April 26, 2019, announces the beginning of the opportunity disclosure stage (teaser) related to the sale of refining and associated logistics assets in Brazil.

The divestments account for about 50% of the national refining capacity, with a total of 1.1 million barrels of processed oil per day, and include the sale of the following assets: Abreu e Lima Refinery (RNEST), Shale Industrialization Unit (SIX), Landulpho Alves Refinery (RLAM), Gabriel Passos Refinery (REGAP), Presidente Getúlio Vargas Refinery (REPAR), Alberto Pasqualini Refinery (REFAP), Isaac Sabbá Refinery (REMAN) and Lubrificantes e Derivados de Petróleo do Nordeste (LUBNOR), as well as the logistics assets integrated to these refineries.

The sale of these eight refineries will be carried out pursuant to the Petrobras’ divestment methodology, through independent competitive processes, which will take place in two phases.

The first phase, of which the opportunity disclosure stage begins today, includes the following refineries: RNEST in Pernambuco, RLAM in Bahia, REPAR in Paraná, and REFAP in Rio Grande do Sul, as well as their corresponding logistics assets. Teasers of this phase, which include key information about the assets and eligibility criteria for the selection of potential participants, are available on the Petrobras website: http://www.petrobras.com.br/ri.

Teasers of the second phase, comprising REGAP, REMAN, SIX and LUBNOR refineries and their corresponding logistics assets, will be released later this year.

Petrobras Prices 2nd Caixa Econômica Federal Offering (Petrobras, 26.Jun.2019) — Petrobras announced that on June 25, 2019, it priced the global offering by Caixa Econômica Federal (the “Selling Shareholder”) of

The Common Shares were offered and sold to the public at a price of R$30.25 per Common Share.The Common ADSs (each representing two Common Shares) were offered and sold to the public at a price of US$15.84 per Common ADS(including an ADS issuance fee of US$0.04 per Common ADS). The aggregate proceeds of the global offering to the Selling Shareholder, after underwriting discounts and commissions (before expenses), will be equivalent to approximately US$1.9billion.

The global offering is scheduled to close on Friday,June 28, 2019,subject to satisfaction of customary conditions.The Common ADSs are listed on The New York Stock Exchange under the symbol PBR. The Common ADSs offered and sold in the global offering are expected to be delivered on Friday, June28 2019, in time to settle trades completed on The New York Stock Exchange on Tuesday, June 25, 2019.

The Common Shares are listed on the São Paulo Stock Exchange (B3 S.A. –Brasil, Bolsa, Balcão) (“B3”) under the symbol PETR3.The Common Shares offered in the global offering are expected to be delivered on Friday, June 28,2019,in time to settle trades completed on the B3on Tuesday, June 25, 2019.

Caixa Ecônomica Federal, UBS Securities LLC, Morgan Stanley & Co. LLC and BofA Merrill Lynch are acting as global coordinators and joint bookrunners for the international offering. XP Securities, LLC is acting as joint bookrunner for the international offering. Caixa Ecônomica Federal, UBS Brasil Corretora de Câmbio, Títulos e Valores Mobiliários S.A., Banco Morgan Stanley S.A., Bank of America Merrill Lynch Banco Múltiplo S.A. and XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A. are acting as Brazilian underwriters in the Brazilian offering.

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

Petrobras Starts Non-Binding Phase For Sale Of Breitener Energética S.A. (Petrobras, 26.Jun.2019) — Petrobras, following up on the release disclosed on 06/11/2019, announces the beginning of the non-binding phase for the sale of 93.7% of its interest in Breitener Energética S.A., located in the state of Amazonas.

The potential investors qualified for this phase will receive instructions on the divestment process, including guidelines for the elaboration and submission of nonbinding proposals

Petrobras’ Divestment Of Enchova And Pampo Clusters (Petrobras, 25.Jun.2019) — Petrobras, following up on the release dated June 13, 2019, informs that it will hold a new round of final offers for the sale of Enchova and Pampo clusters, a set of producing fields located in the Campos Basin.

This new round aims to clarify some rules of the process ensuring isonomy, transparency and competitiveness in the disinvestment process.

This project is carried out according to the company’s divestment methodology, in line with the provisions of the special procedure for the sale of exploration, development and production of oil, natural gas and other fluid hydrocarbons provided for in Decree 9.355/2018

Petrobras Starts Rio Ventura Cluster Non-Binding Phase (Petrobras, 25.Jun.2019) — Petrobras, following up on the release disclosed on 06/03/2019, announces the beginning of the non-binding phase related to the sale of its total equity interest in eight exploration and production concessions, located in Bahia state, jointly designated as Rio Ventura Cluster.

At this stage, the interested parties qualified in the previous phase will receive instructions on the divestment process, including guidelines for the elaboration and

submission of non-binding proposals, and access to a virtual data room containing more information about the cluster.

CHILE Enel Américas Launches Preemptive Rights Offerings (Enel, 27.Jun.2019) — ENEL AMÉRICAS S.A. announced the launch of the preemptive rights offering in connection with the capital increase approved by the company’s shareholders on April 30, 2019. Pursuant to the capital increase, the company is authorized to issue 18,729,788,686 new shares, which are subject to the preemptive rights offering and are to be offered for cash at a price of US$0.162108214203236 per share.

Each share of Enel Américas common stock held of record on June 21, 2019 will entitle its holder to receive 0.326003960684452 of a transferable preemptive share right to subscribe for shares of common stock. One full preemptive share right is required to subscribe for one new share at a subscription price of US$0.162108214203236 per new share. Enel Américas will accept subscriptions for whole shares only and will not issue fractional shares or cash in lieu of fractional shares. The 30-day subscription period for the preemptive share rights begins on June 27, 2019 and will end on July 26, 2019.

Citibank, N.A., as the depositary for the company’s American Depositary Shares, or ADSs, will distribute to holders of ADSs (each representing 50 shares of common stock) transferable preemptive ADS rights to subscribe for new ADSs at the rate of 0.326003960684452 transferable preemptive ADS rights for each ADS held of record as of 5:00 p.m. (New York City time) on July 2, 2019. Fractional preemptive ADS rights will not be distributed, and any fractional entitlements to ADS rights will be aggregated and sold by Citibank, N.A. and the proceeds distributed to ADS holders otherwise entitled to a fractional preemptive ADS right. In order to subscribe for new ADSs, holders of preemptive ADS rights must pay US$8.31 per new ADS subscribed, which includes ADS rights agent fees of US$0.20 per new ADS subscribed. The preemptive ADS right subscription period will begin on July 3, 2019 and will end at 2:15 p.m. (New York City time) on July 23, 2019.

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

Holders of ADSs who want to sell their transferable preemptive ADS rights must instruct Citibank, N.A., as ADS rights agent, to sell such rights prior to 5:00 p.m. (New York City time) on July 16, 2019.

The preemptive ADS rights are expected to trade on the New York Stock Exchange under the symbol “ENIA RT”.

Trading of the preemptive ADS rights is expected to commence on June 28, 2019 on a “when-issued” basis and continue until July 19, 2019.

Following the initial 30-calendar-day statutory preemptive rights offering period in Chile, to the extent that there are newly authorized shares of common stock not subscribed during the statutory preemptive rights offering period, Enel Américas intends to distribute only to those shareholders, ADS holders and transferees of preemptive share rights and preemptive ADS rights who exercised their preemptive rights in the statutory preemptive rights offering period, in proportion to the number of new shares subscribed by them in the statutory preemptive rights offering period (including in the form of ADSs), additional transferable rights to subscribe for the remaining shares of common stock (including in the form of ADSs) authorized in the capital increase and not subscribed in the preemptive rights offering period (subject to reduction to the extent necessary in order not to substantially exceed the US$3.0 billion limit of the capital increase authorized by Enel Américas’ shareholders) during a subsequent subscription rights offering period (currently expected to be 24 calendar days in Chile). The subsequent subscription rights offering period will commence shortly after the settlement of the statutory preemptive rights offering, and the additional rights will be subject to the same subscription price and certain other terms and conditions as those of the statutory preemptive rights offerings. Citibank, N.A. will distribute the additional ADS rights to eligible ADS holders in connection with the subsequent rights offering.

The additional ADS rights are expected to trade on the New York Stock Exchange under the symbol “ENIA RT”.

The shares of Enel Américas common stock to be offered in the rights offerings have been registered in Chile with the Financial Market Commission, or the CMF. A registration statement on Form F-3 relating to these securities offered in the United States in the rights offerings and a prospectus supplement to the prospectus contained in such registration statement have been or will be filed with the U.S. Securities and Exchange Commission (SEC).

COLOMBIA GeoPark Expands In the Llanos Basin In Colombia (GeoPark, 27.Jun.2019) — GeoPark Limited announced the expansion of its portfolio in Colombia following the successful Agencia Nacional de Hidrocarburos (ANH) bid round in June 2019.

GeoPark was awarded the Llanos 86, Llanos 87 and Llanos 104 blocks in partnership with Hocol (a 100% subsidiary of Ecopetrol) and a right of first refusal for the acquisition of the VIM 22 block.

The acquired blocks represent significant and attractive, low-risk, high potential exploration acreage in the Llanos basin in proximity to GeoPark’s successful Llanos 34 block (GeoPark operated, 45% WI), and surrounded by multiple producing oil and gas fields, as well as existing infrastructure. GeoPark will be the operator with a 50% WI. The Llanos 87 block is located adjacent to and on trend with the Llanos 34 block. The Llanos 86 and Llanos 104 blocks are contiguous areas (20 kilometers southeast of the Llanos 34 block), on trend with nearby producing oil fields. The three blocks cover an aggregate area of 679,292 acres (2,752 sq km) – eight times the size of the Llanos 34 block.

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

GeoPark and Hocol (a 100% subsidiary of Ecopetrol) have preliminarily identified multiple oil prospects and leads, resulting from their proven expertise in the Llanos basin, existing 3D seismic as well as other relevant data.

Geoscience evaluation is ongoing and field operations are expected to start in late 2019 or early 2020.

Geopark Colombia S.A.S. who presented the best initial proposal for the area.

The blocks were awarded to the GeoPark/Hocol (a 100% subsidiary of Ecopetrol) consortium as part of the ANH’s Permanent Process for the Assignment of Areas (“PPAA”) in Bogota, Colombia. Final contracts are expected to be signed in 3Q2019.

The winning bids consisted of commitments to register 550 square km of 3D seismic and to drill six exploration wells during the first exploration phase, with a firm investment commitment of $80-110 million ($40-55 million net to GeoPark) over the next three years, as follows:

As part of the ongoing PPAA bid round, GeoPark has a right of first refusal for the acquisition of a 100% WI in the VIM 22 block(412,172 gross acres)in the Magdalena basin, following the Company’s initial bid on June 4, 2019. Final decision by GeoPark on this block will beJuly 9,2019.

James F. Park, CEO of GeoPark, said: “Congratulations to our Colombian team for succeeding in acquiring this new high potential big acreage position-located right in our own prime and proven neighborhood. And, we are especially excited about our new venture with Hocol (a 100% subsidiary of Ecopetrol) and the opportunity to prove our ability to perform and build a long term successful partnership.”

ANH Colombia Says 10 Oil Blocks Have Been Allocated (ANH Colombia, 26.Jun.2019) — At the end of the Counteroffer Hearing of the first auction of the PPAA, held today, the National Hydrocarbons Agency (ANH) confirmed the allocation of 10 blocks, out of the 11 that were in dispute, and received a counteroffer from Frontera Energy Colombia Ltd. for the VIM22 block, located in the Lower Magdalenta Valley, to compete with

With this result, the allocation of the 11 blocks represents investment commitments of more than 500 million dollars.

“The balance of today’s auction, in which the National Hydrocarbons Agency celebrates 16 years of operation, is excellent news for the country. As of this moment 10 of the 11 disputed blocks are assigned, contracts that can be celebrated in the next days, and there is still a block remaining in competition whose definition will be known on July 9, depending on whether the initial proponent improves the counteroffer received. In this first auction, investment commitments have been generated for more than 500 million dollars, a figure that, added to the five offshore contracts already signed, exceeds 1,500 million dollars. This result, in the first year of the government of President Duque, confirms the confidence of oil investors in the efforts of this Administration to reactivate the sector and restore dynamism to the national economy.”

— ANH President Luis Miguel Morelli The counteroffer received today will be validated by the independent firm ‘Gestión y Audiencia Especializada S.A.S.’, and on July 8 the National Hydrocarbons Agency will publish its acceptance, or not, as a more favorable counteroffer (best counteroffer). On July 9, only Geopark Colombia S.A.S. can execute the option of improving the

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

counteroffer. That day the winner of the block VIM22, last in dispute in the first auction of 2019, will be known.

ECUADOR Glencore To Import 1,890,000 Barrels Of Cutter Stock (Energy Analytics Institute, Piero Stewart, 27.Jun.2019) — EP Petroecuador awarded Glencore Ltda. a deal to import 1,890,000 barrels ± 2% of cutter stock, a diluent used in the preparation of fuel oil.

Glencore offered the cutter stock diluent with a $3.32 per barrel differential, EP PetroEcuador announced 27 June in an official statement.

While 34 companies participated in the international competition, valid offers were considered from Trafigura Pte. Ltd., Freepoint Commodities Llc., Glencore Ltd. and Vitol Inc.

The Rowan EXL II jack-up rig has also been contracted to drill the Cretaceous Carapa prospect in the non-operated Kanuku licence and is expected to commence operations in August.

Tullow also continues to seek to access new acreage in both Africa and South America.

Earlier this year, Tullow won three blocks in the Malvinas West Basin, offshore Argentina, in a competitive bidding round. Tullow won operated 40% interests in Blocks 114 and 119 and a 100% interest in Block 122, with formal award due later this year.

The Government of Peru has approved Tullow’s entry into two licences, Z-38 and Z-64 and work continues to secure other licences. A non-operated, exploration well is being planned for drilling in Z-38 in early 2020.

“Our exciting and potentially material drilling campaign in Guyana will get underway later this month with the spud of the first of three wells planned for 2019.”

— Tullow Oil Plc CEO Paul McDade

Ecuador will import the cutter stock in nine shipments of 210,000 barrels ± 2% each. The first delivery will be between 8-10 July. The imports will cover demand for the derivative through December 2019, EP Petroecuador said.

MEXICO

The marker for this product is Midpoint Platts No.2 Prompt Pipeline from the U.S. Gulf Coast.

Mexico Open Season Q&A: GMEC’s Monroy And Baker Institute’s Duhalt Weigh In

GUYANA Tullow Eyes Two Guyana Exploration Wells In 2H:19 (Tullow, 26.Jun.2019) — In Guyana, Tullow plans to drill two consecutive exploration wells in the second half of 2019 on the Orinduik licence with the Stena Forth drillship which is currently in transit from Ghana.

The first well will target the Lower Tertiary Jethro prospect and drilling is expected to commence at the end of June and take approximately 40 days. The rig will then move to drill the Upper Tertiary Joe prospect.

(Energy Analytics Institute, Aaron Simonsky and Jared Yamin, 25.Jun.2019) — As part of Energy Analytics Institute’s ongoing coverage of the Latin America and Caribbean energy sectors from conventionals and unconventionals to renewables, two oil and gas experts covering Mexico – GMEC’s Director Gonzalo Monroy and Baker Institute’s Fellow Adrian Duhalt – weigh in briefly on Mexico’s open season process.

Mexico Open Season Procedures related to Mexico’s open season establish the foundation for open, non-discriminatory access to Pemex’s pipeline and storage infrastructures. The public auctions were designed to provide greater certainty to

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

importers and sellers, as well as to other actors in the logistical chain in the petroleum market, according to reports on the matter published by Petróleos Mexicanos (Pemex) on its website.

Pemex Logística, the Pemex subsidiary that manages the network of terminals and pipelines of the state company, holds the open season auctions to reserve transportation and storage capacity in roughly 60 terminals and 27 stretches of pipeline throughout various regions of Mexico.

Comments from Adrian Duhalt, Ph.D., a postdoctoral fellow in energy studies at Rice University’s Baker Institute: Energy Analytics Institute (EAI): Are you seeing that private sector companies have lost faith in Pemex and the open season process? If so, is this related to Pemex issues or others?

Comments from Gonzalo Monroy, Director of Mexico Citybased consultancy GMEC:

Adrian Duhalt: There is no doubt private companies question the role of Pemex as partner and the open season process. However, part of this can be attributed to President Lopez Obrador’s stance concerning the scope of participation of private firms in activities related to the energy sector. In that sense, uncertainty is yet to be dissipated.

Energy Analytics Institute (EAI): Did the situation earlier this year with fuel thefts in any way alter the way companies view Pemex and the open season process?

Another factor is the rule of law. Fuel theft continues to be a challenge and that raises concerns among private players.

Gonzalo Monroy: The problem earlier this year with the fuel thefts by the so-called fuel thieves, or huachicoleros in Spanish, and the resultant lack of fuel supply earlier this year showed gasoline station owners that Pemex was not a reliable supplier. Thus, many then started to look for new supply sources. The open season, designed to give access to Pemex’s idle pipeline transport infrastructure to third parties, has basically been a fiasco.

Energy Analytics Institute (EAI): Are you seeing the private sector taking on more projects alone to continue bringing product into Mexico: pipelines, trucking fleets, storage options? Is the private sector still willing to work with AMLO?

What follows are excerpts from our conversations with Monroy and then Duhalt for our series: LatAmNRG Q&A.

What has happened as a result of recent events is that even though Pemex is offering access to third parties, there is a lack of interest from them.

For example, we are seeing that Valero is interested in boosting its presence in Mexico as it relates to infrastructure and service stations, and that it is even considering Mexican partners. The company is basically saying it will not move forward with Pemex, but it is willing to compete in the Mexican market.

It is apparent expansion of Mexico’s market will not come from Pemex, but from the private sector. On the other side and interestingly we are also seeing Shell and BP continue with their strategies of growing in partnership with Pemex.

So, what we see developing are two competing models.

One were companies will supply their own resources (either via train or pipeline) and another were companies will supply resources with use of Pemex’s infrastructure.

Adrian Duhalt: We are seeing more companies developing projects to transport fuel without Pemex in the equation.

That’s a step that could be costly in the short run, but it may pay off in the long term as private companies will eventually build branding and marketing capabilities and that, unfortunately for Pemex, will lead to greater market share.

Despite all, private firms are willing to work with AMLO and Pemex. Let’s not forget that Pemex is, and will continue to be, the backbone of the energy sector in Mexico.

Pemex To Invest Combined $283mn In Uchbal Field (Energy Analytics Institute, Jared Yamin, 29.Jun.2019) — Mexico’s state oil company Petróleos Mexicanos (Pemex) plans to invest $266 million in development activities related at the Uchbal field, corresponding to its allocation AE-0006-5M-Amoca Yaxché-04, and according to the exploration and production plan approved by Mexico’s

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

National Hydrocarbons Commission (CNH by its Spanish acronym).

In addition, Pemex plans to invest another $16.59 million on maintenance and infrastructure abandonment once wells cease to be functional, reported online media El Financiero.

Pemex expects to recover 15.8 million barrels of oil and 7.2 billion cubic feet of natural gas through the drilling of four wells at the Uchbal Field located in the Southeastern Basins.

BOD Approves Merger Of PEPPPS And TRI-Pemex Etileno (Energy Analytics Institute, Jared Yamin, 28.Jun.2019) — The Board of Directors of Petróleos Mexicanos (Pemex) unanimously approved, at the proposal of the General Director, Octavio Romero Oropeza, the merger of subsidiary production companies: Pemex Exploration and Production (PEP) with PPS and Pemex Industrial Transformation (TRI) with Pemex Etileno.

This is the seventh development plan from Pemex Exploration and Production (PEP) to be approved by CNH. Pemex has classified 20 fields as priorities in its aim to increase oil production to 2.6 million barrels per day (MMb/d) by 2024, the media reported.

In Extraordinary Session 944, the Board of Directors authorized the mergers, which take effect 1 July as part of the new organizational structure approved 26 March.

As a result, PEP and TRI will subsist as merging companies and PPS and Etileno will be extinguished as merged companies, Pemex said.

Other field plans approved by CNH include: Ixachi, Cahua, Cheek, Esah, Chocol and Xikin. By 2022, peak production from these six fields plus Uchbal could add almost 200,000 barrels per day of oil production.

Talos Energy Completes Zama Appraisal Program

Pemex Refinances $8bn In Debt (Energy Analytics Institute, Jared Yamin, 28.Jun.2019) — Mexico’s state oil and gas entity Pemex announced refinancing of $8 billion in debt with support of 23 national and international banking institutions, the company announced in an official statement.

The agreement allows Pemex to refinance up to $2.5 billion in debt and to renew two revolving credit lines for a combined amount $5.5 billion dollars. Additionally, the financial operation didn’t require any collateral, Pemex said 28 June.

The interest rate for the refinancing is Libor + 235, which is equivalent, at the close of the operation, to a fixed rate of 4.15%, Pemex also said.

Banks participated in the refinancing were: JP Morgan, Mizuho, HSBC, BBVA, BNP Paribas, MUFG Bank, Sumitomo Mitsui Banking Corporation, Bank of America, Bank of China, Banco Santander, Natixis, Barclays, Scotiabank, Société Générale , Credit Agricole, Citibank, ICBC, Goldman Sachs, Morgan Stanley, Banorte, ING, Credit and Investment Bank and DZ Bank.

(Talos, 26.Jun.2019) — Talos Energy Inc. provided an update on the Zama appraisal program in Block 7, located in the offshore portion of Mexico’s prolific Sureste Basin.

Talos is the operator of Block 7 in a consortium (the “Consortium”) with its partners Sierra Oil & Gas, a Wintershall DEA company, and Premier Oil. The Zama-3 appraisal well is the third and final appraisal penetration drilled by the Consortium to better define the resource potential of the Zama discovery. The Zama-2 and Zama-2 ST1 appraisal penetrations, both drilled in the first half of 2019, generated results that met or exceeded the Consortium’s expectations. The Zama-3 well was drilled approximately 1.5 miles (2.4 kilometers) south of the original Zama-1 location with the goals of testing the southern extent of the reservoir and capturing additional reservoir description data.

The Consortium is continuing to evaluate the full universe of data and samples collected from its four penetrations of the Zama reservoir, including approximately 1,450 feet of whole core, fluid samples from 30 separate points in the reservoir, 180 pressure points, 25 logging runs and two extended flow tests, with the goal of integrating this data with internal models and sharing it with external auditors to produce an updated contingent recoverable resource report by year end. However, based on the preliminary information collected to date, Talos expects

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

the updated value will fall in the upper half of the previously provided pre-appraisal guidance range of 400800 MMBoe. The results specific to the Zama-3 well were as follows: — The well was drilled downdip of the Zama-1 well, allowing the well to penetrate the oil-water contact in the southern portion of the field, consistent with the geophysical flat spot seen throughout the downdip edge of the reservoir. The well logged approximately 1,000 feet (greater than 300 meters) of gross true vertical depth (“TVD”) sand and 748 feet (228 meters) of gross TVD pay bearing section, consistent with expectations for the southern extension of the Zama reservoir. The net to gross ratio across the entire pay section is consistent with prior penetrations, with Zone 3 significantly exceeding expectations with a net to gross ratio of approximately 85-90%. Zones 3 and 4 comprise the majority of the Zama resource potential.

— Talos captured 717 feet (219 meters) of whole core with 99% recovery, breaking its own record for the longest whole core from a single well in the history of offshore Mexico. The additional core samples will provide critical information to assist the Consortium in evaluating expected recovery factors, completion techniques and other details to aid in optimizing recovery in the Zama field.

potential that have already made Zama a globallyrecognized asset. The match of the preliminary well data to our geophysical model suggests that we have a gross recoverable resource in the upper half of our preappraisal guidance range of 400-800 MMBoe. With the collaboration of our Consortium partners, Pemex and the Mexican government authorities, we look forward to reaching FID as soon as possible and then turning our attention toward first oil. I’m extremely proud of our operating performance throughout the exploration and appraisal program, and we are excited to advance the project to full realization in the near future.”

Premier Makes Significant Resource Upgrade At Zama (Premier, 27.Jun.2019) — Premier has significantly increased its resource estimate of the Zama field offshore Mexico, following its evaluation of the data acquired from the highly successful Talos Energy-operated Block 7 Zama appraisal campaign. The campaign comprised two appraisal wells (Zama-2 and Zama-3) and a vertical sidetrack (Zama-ST1) which was flow tested.

— Operations for the Zama-3 well were concluded approximately nine days ahead of schedule and within budget. The entire three-penetration appraisal program was finalized 39 days ahead of schedule and under budget. The appraisal was conducted without any lost time incidents or environmental issues over approximately 600,000 man-hours. Local contractors and service providers were again critical in delivering positive results for the Consortium.

The Consortium is simultaneously advancing both its front-end engineering and design (FEED) work streams as well as unitization discussions with Petróleos Mexicanos (Pemex), with the aim of making a Final Investment Decision (FID) on the project in 2020, pending required government approvals.

The latest appraisal well, Zama-3, has proven the lateral continuity of the reservoir 2.4 kilometres to the south of Zama-1 with the quality of the reservoir sands encountered at the upper end of expectations.

Talos President and Chief Executive Officer Timothy S. Duncan commented, “Based on the preliminary results of our appraisal program, we have confirmed the combination of outstanding subsurface properties, significant recoverable volumes and attractive economic

A comprehensive set of data was acquired during the campaign, including high resolution wireline logs, extensive fluid sampling and pressure data, together with the recovery of over 400 metres of core and a drill stem test to confirm well productivity.

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

Related Story: Talos Energy Completes Zama Appraisal Program The data has demonstrated reservoir properties at the upper end of expectation, including a higher net-to-gross ratio, better porosity and increased hydrocarbon saturation. This has resulted in a higher estimated oil-inplace and ultimate recovery from the Zama field.

Consequently, Premier has refined its gross resource estimate of the Zama structure to 670-810-970 mmboe (P90-P50-P10).

“We are delighted with the results of the latest Zama appraisal well which, together with the positive results from the earlier appraisal wells, has caused us to significantly upgrade our resource estimates of the Zama structure. Our focus now turns to selecting the optimal development for the field, ahead of taking a final investment decision next year.”

– Premier CEO Tony Durrant

Pemex To Supply 240 MMcf/d To Yucatan Peninsula (Energy Analytics Institute, Jared Yamin, 25.Jun.2019) — Mexico’s state oil and gas entity Pemex will supply the Yucatan Peninsula with 240 million cubic feet (MMcf/d) of natural gas starting 15 July, according to a statement by Mexico’s Energy Secretariat and the National Center for Natural Gas Control, reported online media El Financiero.

Mexico’s CNH Approves BP’s Offshore Drilling Plan (Reuters, Rebekah Ward, 25.Jun.2019) — Mexico’s oil regulator approved a $97 million plan for drilling in an offshore area operated by British supermajor BP in the southern Gulf of Mexico.

TRINIDAD TPHL Announces Expiration And Final Results (TPHL, 25.Jun.2019) — Trinidad Petroleum Holdings Limited (TPHL) announced the expiration and final results of its previously announced offers to exchange any and all of its outstanding notes, originally issued by Petroleum Company of Trinidad and Tobago Limited (Petrotrin), for newly issued debt securities of TPHL (the “Exchange Offers”), upon the terms and subject to the conditions described in the Offering Memorandum, dated April 15, 2019 and amended by the related press releases dated April 29, 2019, May 6, 2019, May 13, 2019, May 24, 2019, May 31, 2019, June 6, 2019 and June 20, 2019 (as may be further amended or supplemented from time to time, the “Offering Memorandum”), and the related letter of transmittal (as may be amended or supplemented from time to time, the “Letter of Transmittal”), and to its solicitation of consents to certain proposed amendments to the existing indentures (the “Consent Solicitations”).

The Exchange Offers and Consent Solicitations expired at 5:00 p.m., New York City time, on June 21, 2019 (the “Extended Expiration Date”).

As of the Extended Expiration Date, the aggregate principal amount of Existing Notes validly tendered was U.S.$570,295,500. The valid tender, without subsequent withdrawal, of at least U.S.$150 million aggregate principal amount of Existing Notes (the “Amended Minimum Tender Condition”) has been met. The breakdown of the principal amount of validly tendered 2019 Notes and 2022 Notes is as set forth in the table below.

The four-year exploration plan approved by the national hydrocarbons commission (CNH) covers a 700,000 square kilometer shallow water block, located north of the coast of Tabasco state.

In connection with the Exchange Offers, TPHL also announced that it has modified the Financing Condition

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

to, instead of requiring the receipt of the proceeds from the Term Loan Facility (as defined in the Offering Memorandum), now require the execution (without the actual receipt of proceeds at or prior to settlement of the Exchange Offers) of a credit agreement in an amount up to U.S.$720,000,000 with Credit Suisse AG, Cayman Islands Branch, Banco Latinoamericano de Comercio Exterior, S.A., First Citizens Bank Limited and The Bank Of Nova Scotia, as joint lead arrangers. As of the Extended Expiration Date, the modified Financing Condition has been met.

The settlement of the Exchange Offers is expected to occur on June 28, 2019. Eligible holders of Existing Notes who validly tendered and did not validly withdraw such notes at or prior to the Extended Expiration Date are eligible to receive the Total Consideration or Exchange Consideration (as defined in the Offering Memorandum), as applicable. The aggregate principal amount of TPHL’s 9.75% Senior Secured Notes due 2026 to be issued as consideration for the Exchange Offers payable on the Settlement Date is U.S.$570,265,000, which reflects the rounding down to the nearest integral multiple of U.S.$1,000. No additional consideration will be paid in lieu of fractional New Notes not received as a result of such rounding down. Because the amount of 2019 Notes tendered is less than the 2019 New Notes Cap, the Total Consideration or Exchange Consideration will include only New Notes and will not include cash, other than as payment for the Consent Fee or Additional Early Tender Consideration, if applicable.

Eligible Holders who validly tendered Existing Notes at or prior to the Early Tender Deadline will receive the Additional Early Tender Consideration (an additional U.S.$10 of cash for each U.S.$1,000 principal amount of Existing Notes accepted for exchange) because the Amended Minimum Tender Condition of at least U.S.$350 million in aggregate principal amount of 2019 Notes tendered was met. As previously stated, Supporting Existing Notes Holders and any additional Eligible Holders whose Existing Notes were validly tendered and accepted after May 10, 2019 will receive a Consent Fee of U.S.$10 per U.S.$1,000 or one percent (1%) of Existing Notes and, because Eligible Holders of Existing Notes validly tendered and did not withdraw U.S.$150 million or more in aggregate principal amount of Existing Notes on or after June 5, 2019, a portion of their Consent Fee will be deducted and used to pay the reasonable and documented fees and costs of the advisors of the Supporting Existing Notes Holders in an amount up to U.S.$2.85 million (the “Fees and Expenses Deduction”).

The Consent Fee payable will be U.S.$6.80 per U.S.$1,000 for Existing Notes tendered after May 10, 2019 after taking into account the Fees and Expenses Deduction for the applicable tendering Eligible Holders.

VENEZUELA Court To Decide Fight For Control Of US Refiner Citgo (Reuters, 26.Jun.2019) — A U.S. court will decide whether a board of directors appointed by Venezuelan President Nicolas Maduro or one backed by his rival, opposition leader Juan Guaido, runs the eighth-largest U.S. refiner, Citgo Petroleum Corp.

A lawsuit filed by Maduro’s representatives in Delaware Chancery Court seeks to reassert control over Citgo, along with other U.S. subsidiaries of PDVSA, the Venezuelan state-run oil company.

Citgo, Venezuela’s most important foreign asset, has been caught in a tug-of-war as U.S. President Donald Trump’s government has tried to use the firm as leverage to topple Maduro.

INT’L NASA To Livestream South America Total Solar Eclipse (NASA, 27.Jun.2019) — NASA has partnered with the Exploratorium in San Francisco to bring live views to people across the world of a total solar eclipse, occurring Tuesday, July 2, over South America. The eclipse will only be visible directly to observers within the path of totality, which stretches across parts of Chile and Argentina.

NASA will livestream three Exploratorium views via separate players on the agency’s website (all times EDT): — Live views from telescopes in Vicuna, Chile, presented without audio, from 3 to 6 p.m.

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

— A one-hour program with live commentary in English, from 4 to 5 p.m.

— A one-hour program with live commentary in Spanish, from 4 to 5 p.m.

NASA Television will also carry the English-language program on its public channel. Both programs will feature updates from NASA’s Parker Solar Probe and Magnetospheric Multiscale missions.

Studying the Sun during total solar eclipses helps scientists understand the source and behavior of solar radiation that drives space weather near Earth, which can affect the health of astronauts in space and the durability of materials used to build spacecraft. Similar data will be important in planning NASA’s return of astronauts to the Moon in 2024 and eventual crewed missions to Mars.

JinkoSolar Announces 1Q:19 Financial Results (JinkoSolar, 28.Jun.2019) — JinkoSolar Holding Co., Ltd. announced its unaudited financial results for the first quarter ended March 31, 2019.

First Quarter 2019 Highlights — Total solar module shipments were 3,037 megawatts (“MW”), a decrease of 16.1% from 3,618 (including intragroup solar module shipments) MW in the fourth quarter of 2018 and an increase of 50.7% from 2,015 MW in the first quarter of 2018.

— Total revenues were RMB 5.82 billion (US$867.5 million), a decrease of 24.6% from the fourth quarter of 2018 and an increase of 27.5% from the first quarter of 2018.

— Gross margin was 16.6%, compared with 14.7% in the fourth quarter of 2018, and 14.4% in the first quarter of 2018.

— Income from operations was RMB235.7 million (US$35.1 million), compared with RMB237.4 million in the fourth quarter of 2018 and RMB125.0 million in the first quarter of 2018.

— Net income attributable to the Company’s ordinary shareholders was RMB40.2 million (US$6.0 million) in the first quarter of 2019, compared with RMB114.8 million in the fourth quarter of 2018 and RMB3.6 million in the first quarter of 2018.

— Diluted earnings per American depositary share (“ADS”) were RMB1.016 (US$0.152) in the first quarter of 2019.

— Non-GAAP net income attributable to the Company’s ordinary shareholders in the first quarter of 2019 was RMB33.3 million (US$5.0 million), compared with RMB111.8 million in the fourth quarter of 2018 and RMB11.0 million in the first quarter of 2018.

— Non-GAAP basic and diluted earnings per ADS were RMB0.848 (US$0.128) and RMB0.840 (US$0.124) in the first quarter of 2019, compared with RMB2.852 and RMB2.852 in the fourth quarter of 2018 and RMB0.300 and RMB0.296 in the first quarter of 2018, respectively.

Mr. Kangping Chen, JinkoSolar’s Chief Executive Officer commented, “We started the year strongly as we continue diversifying our global distribution network and expanding our market share in key overseas markets.

Module shipments during the first quarter were 3,037 megawatts, an increase of 50.7% year-over-year and a decrease of 16.1% sequentially. Our gross margin was 16.6%, up from 14.7% sequentially and 14.4% year-overyear as we increasingly benefit from a higher proportion of sales being generated by our self-produced high efficiency mono products and further reductions in production cost.”

“We continue to see strong demand from overseas markets and have secured the vast majority of our order book for the rest of the year. The global solar market continues to generate rapid and sustainable growth momentum as grid parity approaches, in particular for our high-efficiency mono products which are continuously in short supply. Our global distribution network allowed us to quickly meet growing demand for our high-efficiency mono products over the past few quarters as the market transitioned. We are accelerating the expansion of our high-efficiency mono production capacity and estimate they will account for over 60% of our total shipments for the year.”

ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS

Global Perspective.

Latin America And Caribbean Focus.

#LatAmNRG ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS