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For the three and six months ended December 31, 2012, the Corporation also had minor crude oil production from its Capella and Entrerrios properties in Colombia. Capella, in particular, was shut-in for the majority of the time period; however, production recommenced in early December 2012. December 2012 production averaged 1,975 bopd gross (198 bopd net) from 10 of the 31 wells development wells drilled into the field to date.

Ecuador tariff production has steadily increased in calendar 2012 and is expected to continue to increase into calendar 2013, contributing a significant portion to the Corporation's total production in the future as the capital program is executed. For the three and six months ended December 31, 2012, Ecuador tariff production was 316 bopd and 186 bopd, respectively. The Corporation receives a set tariff price of $39.53 under the Ecuador incremental production contract; however, since all production expenses are the responsibility of the operator, PetroEcuador, operating netbacks are very favourable. The Corporation expects to spend approximately $21 million on capital expenditures in Ecuador in calendar 2013.

Average daily net production for the month of January 2013, was approximately 7,800 boepd, which consisted of approximately 4,650 bopd of crude oil and natural gas liquids and 3,150 boepd of natural gas. Average daily net production from February 1 to February 10, 2013 was approximately 8,000 boepd, which consisted of 4,700 bopd of crude oil and natural gas liquids and 3,300 boepd of natural gas.

Results from Operations

The Corporation recorded net income of $3.1 million and a net loss of $3.0 million for the three and six months ended December 31, 2012, respectively. The Corporation experienced a challenging quarter in terms of operating cash flows as the production decline at the Rancho Hermoso field was not offset until December 2012 by the recent new light oil discovery well at LLA 23 and the acquisition of the Shona production assets on December 21, 2012. Further, cost savings from the new power generation facility at Rancho Hermoso are not expected until the facility becomes operational in calendar Q1 2013 and, consequently, the Corporation was faced with continued high diesel running costs during the quarter. As a result, funds from operations were $3.0 million and $17.0 million for the three and six months ended December 31, 2012, respectively. As discussed above, production at Rancho Hermoso has stabilized and the Corporation expects to see the full benefit of additional production from Esperanza and LLA 23 in calendar Q1 2013. LLA 23, in particular, achieved a netback of $59.63/bbl during the reporting period using high cost temporary production facilities that are expected to be replaced shortly with permanent facilities, including a generator that uses low cost LPGs from the Rancho Hermoso field. The Corporation further expects to see production expense savings at Rancho Hermoso in calendar 2013 as a result of cost saving measures being implemented, as well as realize significant synergies on general and administrative expenses in calendar 2013 with the integration of Shona. Cost control will remain a key focus of the Corporation through calendar 2013.

Exploration and Development Activities

The Corporation spent $22.7 million and $41.6 million on exploration and development projects for the three and six months ended December 31, 2012, respectively. Most significantly, the Corporation announced two oil discoveries: the Labrador discovery on the LLA 23 in the Llanos Basin and the Mono Arana 1 discovery on the VMM2 block in the Middle Magdalena Basin, as further described above.