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Pacific Exploration suffered a major setback in March last year, after Colombia’s state-run Ecopetrol refused to extend its contract to operate the country’s highest-producing Rubiales oilfield.

JOSE MIGUEL GOMEZ/REUTERS

EIG Global Energy Partners has submitted a new bid for Pacific Exploration & Production Corp. with $830-million in creditor recovery that the private-equity firm argues is "vastly superior" to one selected last month by the board of the Colombia-based oil producer.

The new bid comes ahead of a Tuesday court hearing in Canada on Pacific's restructuring plan. Last month, Pacific selected a proposal submitted by Canada's Catalyst Capital Group Inc. after an auction that included rival bids by EIG, Gran Tierra Energy Inc. and Alfa SAB, according to people familiar with the matter.

The Catalyst bid, which was spearheaded by Pacific's co-chairmen and founders, Serafino Iacono and Miguel De La Campa, has the support of more than 75 per cent of the company's noteholders and lenders, well in excess of the two-thirds required, Pacific said Friday in a statement.

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"With this first hurdle now firmly passed we look forward to working with Catalyst, the courts and other stakeholders to complete the restructuring transaction as quickly as possible," said Ronald Pantin, Pacific's chief executive officer.

EIG wants to derail those plans with its new bid, which the company's CEO R. Blair Thomas said is superior to the Catalyst offer. EIG's new bid was submitted on Saturday in letters and documents obtained by Bloomberg that were sent to Pacific's board and financial advisers, regulators in Colombia, as well as the Canadian court-appointed monitor, PricewaterhouseCoopers Inc.

"We wish to reiterate our full commitment to the proposed transaction and our strong belief that we are uniquely positioned to offer the best available combination of value, expediency and certainty of execution to Pacific E&P and all of its stakeholders," he wrote in the letters.

In a breakdown of the two offers, Washington-based EIG argues in its letter that the total creditor recovery of $830 million in its new bid is 67 per cent higher than the Catalyst offer and the implied enterprise value of $1.53-billion is 39 per cent higher.

The $300-million sponsor equity contributed to the company is 20 per cent higher in the new bid than what Catalyst proposed, the letter said. The $550-million in total cash contributed to the company is also 10 per cent higher than Catalyst's. EIG said the binding offer will expire May 31.

Catalyst Response

Catalyst said Saturday that EIG's new offer wasn't superior to its own.

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"Notwithstanding EIG's rhetoric, an examination of its latest proposal shows its latest bid to be once again inferior, which may explain why EIG has rushed to make the bid public without giving the board time to duly consider it," Gabriel de Alba, managing director of Catalyst, said in an e-mail.

Representatives for EIG and Pacific declined to comment.

Pacific failed to make bond interest payments in January and March and has struggled after a series of deals in recent years ballooned the company's debt before oil prices plunged. It has since filed for creditor protection in the Superior Court of Justice in Ontario.

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