RIO DE JANEIRO, July 1, 2015 /CNW/ - Petro Rio S.A.
("PetroRio" or the "Company") (BM&FBOVESPA: PRIO3, TSX-V: HRP)
hereby announces the signing of a purchase and sale agreement to
acquire 20% of the rights and obligations of the concession
contracts for the Bijupirá and Salema ("BJSA") Fields with Petróleo
Brasileiro S.A. ("Petrobras"). In January
2015, PetroRio announced the execution of a purchase and
sale agreement to acquire 80% of the rights and obligations of the
concession contracts for these fields with Shell Brasil Petróleo
Ltda ("Shell"). Therefore, after the approval of the transaction by
regulatory agencies and satisfaction or waiver of all closing
conditions, PetroRio will hold 100% stake in BJSA Fields and will
be their operator.
The total transaction price is US$ 25
million, subject to adjustments, payable in cash. Of this
amount, 20% will be paid with the Company´s own funds and 80% will
be funded through structured finance facilities. This transaction
includes the 20% stake held by Petrobras in the BJSA Fields and
equipment related to their operation.
The BJSA fields are located in the Campos Basin, in water depths
of 480 and 850 meters. The concessions cover an area of 40,000,000
m2, with a daily production of 22,000 barrels of oil and 325,000 m3
of associated gas, which are equivalent to 24,000 boe/day. The oil
extracted from the fields is light oil (from 28° to 31° API). The
BJSA Fields are located just 80km northeast of the Polvo Field,
PetroRio's production asset, which will allow important synergy
gains between the Company's operations.
The BJSA Fields acquisition is an important milestone for
PetroRio, since it corroborates the Company´s growth strategy
through the acquisition of fields already in production. It is
estimated that the production from the BJSA Fields shall increase
substantially PetroRio´s current levels of production. The
conclusion of this agreement confirms PetroRio among the most
important emerging companies of the local oil industry,
consolidating its position as one of the largest independent
producers in Brazil.
PetroRio is focusing in the development of a solid growth
platform aiming at generating value for its shareholders. It has
been achieving excellent results in the operation of Polvo Field,
which can be proved by the efficient understanding of the
reservoir, improved production curve (more stable and with fewer
interruptions) and excellent levels of operational efficiency. The
quest for increased operational efficiency coupled with the
reduction in production costs will be PetroRio's priority in the
BJSA Fields operation.
The conclusion of the purchase and sale transaction between
PetroRio and Petrobras is subject to certain conditions precedent,
including approval of the assignment of rights by Brazil's Council for Economic Defense (CADE)
and the National Agency of Petroleum, Natural Gas and Biofuels
(ANP).
The Company's GDSs will continue to be traded under the ticker
symbol HRP in the TSX-V until the change to the new ticker symbol,
PRJ, is concluded.
Sedar Profile # 00031536
Neither the TSX Venture
Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
About PetroRio
PetroRio is one of the largest
independent companies in the oil and gas production in Brazil. It is the operator of the Polvo Field,
located in the Campos Basin, where it holds a 60% participating
interest. The Polvo Field has Brazil's seventh largest daily production of
barrels of oil equivalent (boe). PetroRio is the owner of "Polvo A"
fixed platform and a 3.000HP drilling rig, currently in operation
in this Field, being the platform connected to the "Polvo FPSO"
vessel, with capacity to segregate hydrocarbons and water
treatment, oil storage and offloading. Polvo Field license covers
an area of approximately 134km2, with several prospects with
potential for further explorations. In January 2015, PetroRio announced the proposed
acquisition of 80% of the Bijupira and Salema Fields located at the same basin, Campos
Basin, at a distance of approximately 80 km from the Polvo Field.
In June 2015, PetroRio announced the
proposed acquisition of the remaining 20%. The Bijupira and
Salema Fields will allow PetroRio to
triple its current production volume. The BJSA acquisition is
subject to the approval of Brazil's National Agency of Petroleum, Natural
Gas and Biofuels (ANP).
The Company´s corporate culture seeks to increase production
through the acquisition of new production assets, the
re-exploration of assets, increased operational efficiency and
reduction of production costs and corporate expenses. PetroRio's
main objective is to create value for its shareholders with growing
financial discipline and preserving its liquidity, with full
respect for safety and the environment. For further information,
please visit the Company's website: www.petroriosa.com.br.
Disclaimer
This news release contains forward-looking
statements. All statements other than statements of historical fact
contained in this news release are forward-looking statements,
including, without limitation, statements regarding our drilling
and seismic plans, operating costs, acquisitions of equipment,
expectations of finding oil, the quality of oil we expect to
produce and our other plans and objectives. Readers can identify
many of these statements by looking for words such as "expects",
"believe", "hope" and "will" and similar words or the negative
thereof. Although management believes that the expectations
represented in such forward-looking statements are reasonable,
there can be no assurance that such expectations will prove to be
correct. By their nature, forward-looking statements require us to
make assumptions and, accordingly, forward-looking statements are
subject to inherent risks and uncertainties. We caution readers of
this news release not to place undue reliance on our
forward-looking statements because a number of factors may cause
actual future circumstances, results, conditions, actions or events
to differ materially from the plans, expectations, estimates or
intentions expressed in the forward-looking statements and the
assumptions underlying the forward-looking statements.
The following risk factors could affect our operations, as well
as our ability to complete the proposed acquisition: the contingent
resource and prospective resource evaluation reports involving a
significant degree of uncertainty and being based on projections
that may not prove to be accurate; inherent risks to the
exploration and production of oil and natural gas; limited
operating history as an oil and natural gas exploration and
production company; drilling and other operational hazards;
breakdown or failure of equipment or processes; contractor or
operator errors; non-performance by third party contractors; labor
disputes, disruptions or declines in productivity; increases in
materials or labor costs; inability to attract sufficient labor;
requirements for significant capital investment and maintenance
expenses which HRT may not be able to finance; cost overruns and
delays; exposure to fluctuations in currency and commodity prices;
political and economic conditions in Namibia and Brazil; complex laws that can affect the cost,
manner or feasibility of doing business; environmental, safety and
health regulation which may become stricter in the future and lead
to an increase in liabilities and capital expenditures, including
indemnity and penalties for environmental damage; early
termination, non-renewal and other similar provisions in concession
contracts; and competition. We caution that this list of factors is
not exhaustive and that, when relying on forward-looking statements
to make decisions, investors and others should also carefully
consider other uncertainties and potential events. The
forward-looking statements herein are made based on the assumption
that our plans and operations will not be affected by such risks,
but that, if our plans and operations are affected by such risks,
the forward-looking statements may become inaccurate.
The forward-looking statements contained herein are expressly
qualified in their entirety by this cautionary statement. The
forward-looking statements included in this news release are made
as of the date of this news release. Except as required by
applicable securities laws, we do not undertake to update such
forward-looking statements.
Barrels of Oil Equivalent: Disclosure provided
herein in respect of barrels of oil equivalent (BOE) may be
misleading, particularly if used in isolation. A BOE conversion
ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.
SOURCE PetroRio