Attached files
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8-K/A - La Cortez Energy, Inc. | v205379_8ka.htm |
EX-99.2 - La Cortez Energy, Inc. | v205379_ex99-2.htm |
Exhibit
99.1
AVANTE
COLOMBIA S.à.r.l.
CONSOLIDATED
FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
PRICEWATERHOUSECOOPERS
PricewaterhouseCoopers
Ltda.
|
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Calle
100 No. 11 A-35 Piso 5
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|
Apartado
60188
|
|
Conmutador:
634 0555
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|
Fax:
2188544 - 218 9133
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Bogota,
Colombia
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www.pwc.com/co
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REPORT
OF INDEPENDENT AUDITORS
To the
Board of Directors of
La Cortez
Energy, Inc.
In our
opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, shareholder's equity and cash flows
present fairly, in all material respects, the financial position of Avante
Colombia S.a.r.1. and its branch at December 31, 2009 and 2008, and the results
of their operations and cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
/s/
PricewaterhouseCoopers
November
12, 2010
AVANTE COLOMBIA
S.à.r.l.
CONSOLIDATED
BALANCE SHEETS
AS OF DECEMBER 31, 2009 AND
2008
(Amounts
in US Dollars)
2009
|
2008
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
258,110 | 546,810 | ||||||
Accounts
receivable
|
43,151 | 480,617 | ||||||
Total
current assets
|
301,261 | 1,027,427 | ||||||
Oil
and gas properties
|
5,213,351 | 5,396,702 | ||||||
Property,
plant and equipment, net
|
55,440 | 86,846 | ||||||
Total
assets
|
5,570,052 | 6,510,975 | ||||||
LIABILITIES
AND STOCKHOLDER'S EQUITY
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable
|
30,960 | 17,758 | ||||||
Accrued
liabilities
|
235,810 | 861,610 | ||||||
Income
taxes payable
|
54,686 | 13,042 | ||||||
Total
current liabilities
|
321,456 | 892,410 | ||||||
Related
party payables
|
164,368 | 8,956,173 | ||||||
Asset
retirement obligation
|
186,924 | 158,410 | ||||||
Total
liabilities
|
672,748 | 10,006,993 | ||||||
STOCKHOLDER’S
EQUITY (DEFICIT)
|
||||||||
Common
stock
|
9,691,403 | 14,640 | ||||||
Retained
deficit
|
(4,794,099 | ) | (3,510,658 | ) | ||||
Total
stockholder’s equity (deficit)
|
4,897,304 | (3,496,018 | ) | |||||
Total
liabilities and stockholder’s equity (deficit)
|
5,570,052 | 6,510,975 |
The
accompanying notes are an integral part of these consolidated financial
statements.
1
AVANTE COLOMBIA
S.à.r.l.
CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER
31, 2009 AND 2008
(Amounts
in US Dollars)
2009
|
2008
|
|||||||
Revenue
|
||||||||
Sales
of oil
|
- | 106,798 | ||||||
Total
revenue
|
- | 106,798 | ||||||
Lease
operating expense
|
164,816 | 604,690 | ||||||
Cost
of services
|
- | 184,207 | ||||||
Depreciation,
depletion and amortization
|
34,581 | 68,874 | ||||||
Loss
from terrorism
|
115,602 | 267,777 | ||||||
General
and administrative expense
|
451,850 | 509,728 | ||||||
Loss
from operations
|
(766,849 | ) | (1,528,478 | ) | ||||
Other
income (expense)
|
||||||||
Accretion
expense on asset retirement obligation
|
(28,514 | ) | (24,164 | ) | ||||
Interest
expense and bank charges
|
(421,642 | ) | (362,586 | ) | ||||
Interest
income
|
1,525 | 24,671 | ||||||
Foreign
exchange losses
|
(27,907 | ) | (102,670 | ) | ||||
Total
other income (expense)
|
(476,538 | ) | (464,749 | ) | ||||
Loss
before income taxes
|
(1,243,387 | ) | (1,993,227 | ) | ||||
Income
taxes
|
(40,054 | ) | - | |||||
Net
loss
|
(1,283,441 | ) | (1,993,227 | ) | ||||
Weighted
average shares outstanding - basic and diluted
|
2,498 | 125 | ||||||
Net
loss per common share - basic and diluted
|
(513.79 | ) | (15,945.82 | ) |
The
accompanying notes are an integral part of these consolidated financial
statements.
2
AVANTE COLOMBIA
S.à.r.l.
CONSOLIDATED
STATEMENTS OF STOCKHOLDER’S EQUITY
FOR THE YEARS ENDED DECEMBER
31, 2009 AND 2008
(Amounts
in US Dollars)
Additional
|
||||||||||||||||||||
Capital
Stock
|
Paid-In
|
Retained
|
||||||||||||||||||
Shares
|
Par Value
|
Capital
|
Deficit
|
Total
|
||||||||||||||||
Balance,
December 31, 2007
|
125 | 17,500 | (2,860 | ) | (1,517,431 | ) | (1,502,791 | ) | ||||||||||||
Net
loss
|
- | - | - | (1,993,227 | ) | (1,993,227 | ) | |||||||||||||
Balance,
December 31, 2008
|
125 | 17,500 | (2,860 | ) | (3,510,658 | ) | (3,496,018 | ) | ||||||||||||
Stock
issued for capitalization of related party payable
|
66,634 | 9,328,760 | 348,003 | - | 9,676,763 | |||||||||||||||
Net
loss
|
- | - | - | (1,283,441 | ) | (1,283,441 | ) | |||||||||||||
Balance,
December 31, 2009
|
66,759 | 9,346,260 | 345,143 | (4,794,099 | ) | 4,897,304 |
The
accompanying notes are an integral part of these financial
statements.
3
AVANTE COLOMBIA
S.à.r.l.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER
31, 2009 AND 2008
(Amounts
in US Dollars)
2009
|
2008
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
loss
|
(1,283,441 | ) | (1,993,227 | ) | ||||
Adjustments
to reconcile net loss to net cash flow from operating
activities:
|
||||||||
Depreciation,
depletion and amortization
|
63,095 | 93,038 | ||||||
Loss
from terrorism
|
115,602 | 267,777 | ||||||
Write
down of tangible equipment to net realizable value
|
64,234 | - | ||||||
Accrued
interest expense
|
417,345 | 362,290 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
437,466 | (479,659 | ) | |||||
Inventories
|
- | 25,079 | ||||||
Prepaid
expenses and other current assets
|
- | 1,368 | ||||||
Accounts
payable
|
13,202 | (506,800 | ) | |||||
Accrued
liabilities
|
(551,935 | ) | 106,880 | |||||
Income
taxes
|
41,644 | (1,324 | ) | |||||
Net
cash used in operating activities
|
(682,788 | ) | (2,124,578 | ) | ||||
Cash
flows from investing activities:
|
||||||||
Purchase
of fixed assets
|
(73,525 | ) | (1,302,912 | ) | ||||
Net
cash used in investing activities
|
(73,525 | ) | (1,302,912 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Repayments
of related party payables
|
- | (25,803 | ) | |||||
New
related party payables
|
467,613 | 3,632,997 | ||||||
Net
cash provided by financing activities
|
467,613 | 3,607,194 | ||||||
Net
change in cash and cash equivalents
|
(288,700 | ) | 179,704 | |||||
Cash
and cash equivalents, beginning of period
|
546,810 | 367,106 | ||||||
Cash
and cash equivalents, end of period
|
258,110 | 546,810 | ||||||
Cash
payments for interest
|
4,297 | 296 | ||||||
Noncash
investing and financing transactions:
|
||||||||
Capitalization
of related party payables as common stock
|
9,676,763 | - |
The
accompanying notes are an integral part of these financial
statements.
4
AVANTE COLOMBIA
S.à.r.l.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
31, 2009 AND 2008
(Amounts
in US Dollars)
(1) SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Organization, Basis of
Presentation and Description of Business
Avante
Colombia S.à.r.l. (“Avante” or the “Company”) was incorporated under Luxembourg
Law on December 13, 2005, as a private limited liability company (Societé à
résponsabilité limitée). The Company was formed to own and operate
oil and natural gas properties through its wholly owned Colombian branch, Avante
Colombia Ltd. The consolidated financial statements include the
accounts of Avante Colombia S.à.r.l. and Avante Colombia Ltd.
At
December 31, 2009 and 2008 the Company was a wholly owned subsidiary of Avante
Petroleum SA, a Luxembourg company.
Avante
participates as operator, together with its partner Vetra Exploración y
Producción S. A. (previously Petrotesting Colombia S. A.), in two contracts in
Colombia. These are production contracts for previously inactive
discovered fields. The branch participates in the following
percentages:
Contract
|
Percentage
|
|||
Puerto
Barco
|
50 | % | ||
Rio
de Oro
|
50 | % |
As
commented in Note 4, the Puerto Barco field, which had been producing oil, was
seriously damaged by an insurgent attack in July 2008. Consequently,
the contract was suspended from July 7, 2008 until February 28,
2010. The Company is planning to reactivate the production of the
field in 2010 and is discussing with Ecopetrol, the national oil company, the
possibility to extend the Puerto Barco contract.
The Rio
de Oro contract was suspended from March 6, 2007 until February 28, 2010, but
the Company is discussing the possibility of extending that contract as
well.
The
accompanying financial statements have been prepared on the accrual basis of
accounting whereby revenues are recognized when earned, and expenses are
recognized when incurred.
Use of
Estimates
The
preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. Estimates which are
particularly significant to the consolidated financial statements include
depreciation, depletion, asset retirement obligations and accrued
revenues.
Cash
Equivalents
For
purposes of the consolidated statement of cash flows, Avante considers all
highly liquid debt instruments with original maturities of three months or less
to be cash equivalents.
5
Accounts
Receivable
Accounts
receivable are recorded at the invoiced amount and do not bear interest. Avante
routinely assesses the financial strength of its customers. Bad debts are
recorded based on an account-by-account review after all means of collection
have been exhausted and potential recovery is considered remote.
Property and equipment,
net
Property
and equipment consists primarily of office furniture, software and equipment and
is stated at cost. Depreciation is computed on a straight-line basis over the
estimated useful lives ranging from three to five years. Depreciation expense
for the years ended December 31, 2009 and 2008 was $34,581 and $16,750,
respectively.
Oil and Natural Gas
Properties
The
Company follows the successful efforts method of accounting for its oil and
natural gas properties.
Depletion
of capitalized oil and gas costs are based on the units-of-production method
based on proved reserves. Such reserves were determined during 2008 by an
independent petroleum engineering firm. The Company recognized depletion expense
of $52,124 for the year ended December 31, 2008 when there was production.
During 2009 there was no production and, therefore, no depletion was
recorded.
Due to a
terrorist attack on the Company’s oil production facilities in July 2008 (as
discussed in Note 4), the Company’s oil and gas properties has been classified
as having unproved reserves, as defined in SEC Regulation S-X, based on a
determination from an independent petroleum engineer’s report dated July 31,
2010. It was determined that the company could not export the produced oil due
to the damage to the facilities as well as the lack of proper infrastructure to
process and transport the oil production to market.
As
discussed in Note 7, asset retirement costs are recognized when the asset is
placed in service, and are amortized over proved reserves using the
units-of-production method. Asset retirement costs are estimated based upon our
contractual and regulatory commitment to pay future plugging and abandonment
costs.
Oil and
natural gas properties are reviewed for impairment when facts and circumstances
indicate that their carrying value may not be recoverable. Based on management’s
assessment, which includes reviewing available data on geological studies
conducted on the properties and the Company’s definitve plans to drill and
reactivate wells on those properties, there is no impairment that is needed to
be recorded at December 31, 2009 and 2008.
Par value of common
stock
The par
value of the common stock is EUR 100 per share. This was equal to US$140 per
share at December 31, 2009 (US$140 at December 31, 2008).
Revenue
Recognition
Sales of
crude oil are recognized when the delivery to the purchaser has occurred and
title has been transferred. This occurs when oil has been delivered to a
pipeline or a tank lifting has occurred. Crude oil is priced on the delivery
date based upon prevailing prices published by purchasers with certain
adjustments related to oil quality and physical location.
6
Income
Taxes
The
Company accounts for income taxes under the provisions of FASB ASC Topic No. 740
(formerly SFAS No. 109, Accounting for Income Taxes)
which provides for an asset and liability approach in accounting for income
taxes. Under this approach, deferred tax assets and liabilities are recognized
based on anticipated future tax consequences, using currently enacted tax laws,
attributable to temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts calculated for
income tax purposes.
In
recording deferred income tax assets, the Company considers whether it is more
likely than not that some portion or all of the deferred income tax assets will
be realized. The ultimate realization of deferred income tax assets is dependent
upon the generation of future taxable income during the periods in which those
deferred income tax assets would be realizable. The Company considers the
scheduled reversal of deferred income tax liabilities and projected future
taxable income for this determination. The Company established a full valuation
allowance and reduced its net deferred tax asset, principally related to the
Company’s net operating loss carryovers, to zero as of December 31, 2009 and
2008. The Company will continue to assess the valuation allowance against
deferred income tax assets considering all available information obtained in
future reporting periods. If the Company achieves profitable operations in the
future, it may reverse a portion of the valuation allowance in an amount at
least sufficient to eliminate any tax provision in that period. The valuation
allowance has no impact on the Company’s net operating loss (“NOL”) position for
tax purposes, and if the Company generates taxable income in future periods, it
will be able to use its NOLs to offset taxes due at that time.
Foreign
exchange
The
consolidated financial statements are presented in US Dollars, which is also the
functional currency.
Foreign
currency transactions are translated into the functional currency using the
exchange rates prevailing at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognized in the income
statement.
Loss per Common
Share
The
Company accounts for earnings (loss) per share in accordance with FASB ASC Topic
No. 260 – 10 (formerly SFAS No. 128, Earnings per Share), which
establishes the requirements for presenting earnings per share (“EPS”). FASB ASC
Topic No. 260 – 10 requires the presentation of “basic” and “diluted” EPS on the
face of the statement of operations. Basic EPS amounts are calculated using the
weighted average number of common shares outstanding during each period. Diluted
EPS is not currently applicable.
Environmental
The
Company is subject to extensive federal and local environmental laws and
regulations. These laws, which are frequently changing, regulate the discharge
of materials into the environment and may require the Company to remove or
mitigate the environmental effects of the disposal or release of petroleum or
chemical substances at various sites. Environmental expenditures are expensed or
capitalized depending on their future economic benefit. Expenditures that relate
to an existing condition caused by past operations and that have no future
economic benefits are expensed. Liabilities for expenditures of a non-capital
nature are recorded when environmental assessment and/or remediation are
probable, and the costs can be reasonably estimated. Such liabilities are
generally undiscounted unless the timing of cash payments is fixed and readily
determinable.
Recently Issued Accounting
pronouncements
In
December 2007, the Financial Accounting Standards Board (“FASB”) issued
Accounting Standards Codification (“ASC”) 805-10 (formerly Statement of
Financial Accounting Standards No. 141 (revised 2007), Business Combinations ). ASC
805-10 establishes principles and requirements for how an acquirer recognizes
and measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any non-controlling interest in the acquire and the
goodwill acquired. ASC 805-10 also establishes disclosure requirements that will
enable users to evaluate the nature and financial effects of the business
combination. ASC 805-10 is effective for acquisitions that occur in an entity’s
fiscal year that begins after December 15, 2008, which was the Company’s fiscal
year 2009. However, since Avante did not consummate any material business
combinations during the year ended December 31, 2009, the adoption did not
materially affect its consolidated financial statements.
7
In March,
2008, the FASB issued guidance that requires disclosures related to objectives
and strategies for using derivatives; the fair-value amounts of, and gains and
losses on, derivative instruments; and credit-risk-related contingent features
in derivative agreements. This guidance was effective as of the beginning of an
entity’s fiscal year beginning after December 15, 2008, which was the Company’s
fiscal year 2009. The adoption of this guidance did not have a material effect
on the Company’s disclosures as Avante does not hold derivative
instruments.
In May
2009, the FASB issued ASC 855-10 (formerly SFAS No. 165, Subsequent Events ). ASC
855-10 establishes general standards of accounting for and disclosure of events
that occur after the balance sheet date but before financial statements are
issued or are available to be issued. Although there is new terminology, the
standard is based on the same principles as those that currently exist. This
guidance, which includes a new required disclosure of the date through which an
entity has evaluated subsequent events, is effective for interim or annual
periods ending after June 15, 2009. Avante adopted this guidance for the year
ended December 31, 2009. The adoption of this guidance did not have an impact on
the Company’s financial position or results of operations.
In June
2009, the FASB issued ASC 105-10 (formerly SFAS No. 168, The FASB Accounting Standards
Codification TM and the
Hierarchy of Generally Accepted Accounting Principles a replacement of FASB
Statement No. 162), which establishes the FASB Accounting Standards Codification
TM (“Codification”) as the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in conformity with GAAP. Rules and
interpretive releases of the SEC under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants. This guidance was
effective for financial statements issued for interim and annual periods ending
after September 15, 2009. On the effective date of this guidance, all
then-existing non-SEC accounting and reporting standards were superseded, except
as noted within ASC 105-10. Concurrently, all non-grandfathered, non-SEC
accounting literature not included in the Codification is deemed
non-authoritative with some exceptions as noted within the literature. The
adoption of this guidance did not have an impact on Avante’s financial position
or results of operations.
In
January, 2010, the FASB issued ASU 2010-06, Fair Value Measurements and
Disclosures (Topic 820) Improving Disclosures about Fair Value
Measurements, which enhances the usefulness of fair value measurements.
The amended guidance requires both the disaggregation of information in certain
existing disclosures, as well as the inclusion of more robust disclosures about
valuation techniques and inputs to recurring and nonrecurring fair value
measurements. The amended guidance is effective for interim and annual reporting
periods beginning after December 15, 2009, except for the disaggregation
requirement for the reconciliation disclosure of Level 3 measurements, which is
effective for fiscal years beginning after December 15, 2010 and for interim
periods within those years. We adopted ASU 2010-06 effective December 31, 2009,
and the adoption did not have a significant impact on our consolidated financial
statements. We have made all required disclosures.
(2) FAIR VALUES OF FINANCIAL
INSTRUMENTS
The
estimated fair values of the Company’s financial instruments closely approximate
the carrying amounts as discussed below:
Cash and cash equivalents, accounts
receivable, other current assets, accounts payable and other current
liabilities. The carrying amounts approximate fair value due to the short
maturity of these instruments.
Related Parties payables. The
carrying amount of these payables approximates fair value because the interest
charged did not materially differ from market rates for similar
borrowings.
8
(3) OIL AND GAS
PROPERTIES
Oil and
Gas Properties as of December 31, included:
2009
|
2008
|
|||||||
Cost
|
4,695,208 | 4,626,880 | ||||||
Depletion
|
(43,997 | ) | (43,997 | ) | ||||
Intangibles,
net
|
4,651,211 | 4,582,883 | ||||||
Cost
|
444,063 | 700,572 | ||||||
Depletion
|
(16,169 | ) | (20,999 | ) | ||||
Tangibles,
net
|
427,894 | 679,573 | ||||||
Asset
Retirement Costs
|
134,246 | 134,246 | ||||||
Cost
|
5,273,517 | 5,461,698 | ||||||
Depletion
|
(60,166 | ) | (64,996 | ) | ||||
Total
Oil and Gas Properties, net
|
5,213,351 | 5,396,702 |
(4) LOSS FROM
TERRORISM
On July
7, 2008 the Company's oil production facility at La Gabarra in the Puerto Barco
oil field in Colombia was seriously damage by a terrorist attack. The initial
estimated loss of $267,777, which included the cost of the production facilities
destroyed as well as environmental remediation costs, was charged to expense in
2008. Following a detailed field inventory performed in 2009, it was necessary
to write-off the cost of additional equipment which had been lost, although this
was partly offset by lower than expected environmental remediation costs. The
net amount charged to expense in 2009 is $115,602.
(5) PROPERTY, PLANT AND
EQUIPMENT
Property,
Plant and Equipment as of December 31, included:
2009
|
2008
|
|||||||
Cost
|
103,461 | 99,491 | ||||||
Depreciation
|
(55,146 | ) | (21,335 | ) | ||||
Computer
equipment and licenses, net
|
48,315 | 78,156 | ||||||
Cost
|
8,914 | 9,583 | ||||||
Depreciation
|
(1,789 | ) | (893 | ) | ||||
Furniture
and Fittings, net
|
7,125 | 8,690 | ||||||
Cost
|
112,375 | 109,074 | ||||||
Depreciation
|
(56,935 | ) | (22,228 | ) | ||||
Total
Property, Plant and Equipment, net
|
55,440 | 86,846 |
(6) RELATED PARTY
TRANSACTIONS
On
December 18, 2009, the Company issued 66,634 shares of stock for the
capitalization of a related party payable in the amount of
$9,676,763. This amount represented the balance of loans received
from Avante Petroleum S. A., which accrued interest at 5%. The
remaining payable at December 31, 2009 is related to technical assistance
services received from another Avante company.
9
(7) ASSET RETIREMENT
OBLIGATION
ASC 41-20
(formerly FAS No. 143), requires that an asset retirement obligation (“ARO”)
associated with the retirement of a tangible long-lived asset be recognized as a
liability in the period in which it is incurred and becomes determinable. Under
this method, when liabilities for dismantlement and abandonment costs, excluding
salvage values, are initially recorded, the carrying amount of the related oil
and natural gas properties is increased. The fair value of the ARO asset and
liability is measured using expected future cash outflows according to the
Company’s contractual commitments.
The
following table reflects the changes in the ARO during the years ended December
31, 2009 and 2008.
2009
|
2008
|
|||||||
Asset
retirement obligation - beginning of period
|
158,410 | 179,063 | ||||||
Current
period revisions to previous estimates
|
- | (44,817 | ) | |||||
Accretion
during the year
|
28,514 | 24,164 | ||||||
Asset
retirement obligation - end of period
|
186,924 | 158,410 |
(8) INCOME
TAXES
The
Company files tax returns in Colombia and Luxembourg. The current tax
provision of $40,054 for 2009 represents a presumptive (minimum) tax in Colombia
of $54,509 and a provision of $177 in Luxembourg, less an adjustment of $14,632
for a prior year. For 2008 no such tax was calculated.
The
components of the Company’s deferred tax assets at December 31, 2009 and 2008
are as follows:
2009
|
2008
|
|||||||
Deferred
tax effect of:
|
||||||||
Tax
loss carryforwards
|
2,281,490 | 1,697,307 | ||||||
Asset
retirement cost provision
|
61,685 | 52,275 | ||||||
2,343,175 | 1,749,582 | |||||||
Valuation
allowance
|
(2,343,175 | ) | (1,749,582 | ) | ||||
- | - |
Accumulated
tax losses by country as of December 31, 2009 and 2008 are as
follows:
2009
|
2008
|
|||||||
Colombia
|
2,924,000 | 2,034,000 | ||||||
Luxembourg
|
4,605,000 | 3,463,000 |
(9)
EQUITY
The par
value of the Company’s common stock is EUR 100 per share, which is equal to
US$140 per share for financial reporting purposes.
On
December 18, 2009, the Company issued 66,634 shares of stock for the
capitalization of a related party payable in the amount of
$9,676,763.
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(10) SUBSEQUENT
EVENTS
In
February and May 2010, certain equipment, including drill casings, was stolen
from the Company. As a result of this theft, the Company incurred an
uninsured loss of approximately $61,000.
On March
2, 2010 the parent company, Avante Petroleum SA, signed a stock purchase
agreement with La Cortez Energy, Inc. whereby La Cortez Energy,
Inc. acquired the entire outstanding share capital of the Company in
exchange for 10,285,819 common shares of La Cortez Energy, Inc.
Management
has evaluated subsequent events through November 12, 2010, which is the date
these financial statements were issued.
11