Petro Victory, the U.S.-based oil developer focused on Brazilian oilfields; announced this Monday it has expanded its working interest in the São João oil field; in the Barreirinhas Basin to a 100%. After this acquisition the company expanded its oil reserves significantly.
Firstly, the initial transaction agreement included a cash consideration, of US$865,000; to be paid over 14 months. After which the company will hold a 100% interest in the oilfield, onshore Brazil.
Secondly, this further acquisition follows the first purchase, for the 50% interest in the field; the transaction happened back in 2018 for US$135,000; and it included a work program across three wells in concert with the former field operating partner Oeste de Canoas.
Thirdly, according to the company’s statement, from May 2020 through July 2021, Petro-Victory’s 50% non-operating interest in São João generated 7,742 barrels of oil, US$390,000 revenue, and US$232,000 operating profit at an average Brent BO price of US$50.
Moreover, in 2020, the company assessed the field, through geological and geophysical data; and concluded that it had certified 2P Reserves of 787,000 BO; with a PV10 value of US$25 million.
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Petro Victory increases reserves and cost efficiencies
In addition, after the current acquisition of the remaining 50% interest, the company will hold 2P Reserves of 1,574,000 BO; with a PV10 value of $50,068,000 from an investment of approximately US$1,000,000; which also translates into a pre-tax 2P Reserve-Based Book Value return of 4,900%.
Consequently, the company increased its certified 2P reserves in 26%; while its Net 3P Reserves of 4,901,000 BO; with a PV10 valuation of US$155,841,000, increased 22%.
On the other hand, the transaction of the oilfield is still subject to approval by Agência Nacional do Petróleo (ANP) and final sale agreements will be filed with ANP within thirty days. About the relevance of the acquisition, Richard F. Gonzalez, CEO, said. “Acquiring the São João Oil Field contributes significantly to Petro-Victory’s near-term production, revenue growth and shareholder value.”
Finally, he remarked. “Petro-Victory now has 100% Working Interest and 100% operating control in all 19 of the Petro-Victory oil fields. This privileged position enables the Company to successfully execute our development and work programs with maximum cost efficiency and production.”
