Page 10 - LatAmOil Week 38 2019

LatAmOil
NEWS IN BRIEF
LatAmOil
2175 meters and encountered a high quality oil-bearing sandstone reservoir of Upper Ter- tiary age. Joe-1, unlike Jethro-1, targeted a shal- lower reservoir, hence de-risking the potential of prospects identified towards the west of the block. It encountered 14 meters of net oil pay.
Although the discovery opened up a new play type, Rystad Energy believes that the result was not as anticipated. “We now expect the discovery to hold around 40mn to 50mn barrels, compared to a predrill resource estimate of around 150mn barrels, indicating the inferiority of the reservoir quality in terms of thickness compared to the deeper section,” says Palzor Shenga, an explora- tion analyst at Rystad Energy.
This creates an interesting scenario, as the deeper section has not been targeted in Joe-1. “In case the shallower section is identified as the potential target towards the west, this could lead to a reduction of the overall prospectivity of the block, as most of the prospects identified in the block lie towards the west,” Shenga added.
Repsol will drill the Carapa-1 well on the Kanuku block later this month. Rystad Energy predicts that Carapa-1 will hold a similar poten- tial to Jethro, as the prospect follows a similar trend to Jethro.
Rystad Energy, September 17 2019
INVESTMENT
Petrofac sells remaining 51% of Mexican operations
Petrofac announces that it has today signed an agreement to sell its remaining 51% interest in its operations in Mexico, including Santuario, Magallanes and Arenque, to Perenco (Oil & Gas) International. The terms of the transaction are substantially the same as the sale of a 49%
non-controlling interest to Perenco in October 2018. The transaction is subject to regulatory approval and is expected to complete in 2020.
Under the terms of the agreement, Petrofac will receive an initial $37.5mn upon signing and a further minimum payment of $82.5mn upon completion. The total consideration of up to $276mn comprises a fixed amount and a series of contingent amounts that depend upon future milestones, including field development, com- mercial, service contract transition and fiscal terms, and is subject to the level of achievement of the milestones above. Proceeds from the sale will be used to reduce gross debt.
Petrofac’s Group Chief Executive Ayman Asfari said: “This disposal reinforces our posi- tion as a capital-light business and represents further progress in our stated strategy to enhance returns. We are proud of the work we have done since 2011 to enhance production from our operations in Mexico and, in particular, of the country’s first-ever contract migration, which we achieved for the Santuario field in partnership with Pemex and the Mexican authorities.”
Perenco CEO Benoit de la Fouchardière said: “The signing of this agreement to acquire the remaining shares in Petrofac’s Mexico operations marks another strategic move for Perenco, which will allow us to accelerate the deployment of our expertise in relation to the Santuario, Magallanes and Arenque assets. We believe that our unique know-how will significantly enhance the pro- duction and value of these mature fields and allowustoaddressalltheassociatedchallenges.”
“Through our daily performance and the full commitment and support of the Perenco team, we will demonstrate to the state company Pemex that we are the clear partner of choice for the future of these types of mature assets.”
This transaction will be effected by the sale of Petrofac’s remaining 51% interest in Petrofac Netherlands Holding, which indirectly holds
the Santuario Production Sharing Contract, the Magallanes Production Enhancement Con- tract (a tariff-per-barrel-based service contract) and the Arenque Production Enhancement Contract.
The gross assets being disposed of had a carrying amount of $666mn as of December 31, 2018. The net assets being disposed of had a carrying amount of $548n as of December 31, 2018. Related non-controlling interest as of December 31, 2018, stood at $266mn. The assets being disposed of made an underlying business performance profit of $2mn for the year ended December 31, 2018. (A 51% share equals approx- imately $1mn.)
The uncertainty surrounding the Mexican energy reform programme is expected to result in a small non-cash impairment charge. An impairment charge will take into account, inter alia, management’s assessment of the fair value of contingent consideration, which will include an assessment of future Production Enhancement Contract transitions.
Petrofac, September 19 2019
Petrobras reports on advance of Eletrobras receivables in the amount of BRL 8.4bn
Petrobras reports that today it entered into a Ces- sion Agreement of Credit Rights, allowing the advance of about BRL 8.4Bn of receivables from Eletrobras, recogniSed in the Debt Assumption Agreements (IADs) referring to the totality of the debts confessed in 2014 by the Eletrobras Group, with original maturity until January 2025.
The agreement was signed with a credit rights investment fund, in a transaction structured by Banco Santander (Brasil), Banco Itaú BBA and BB Banco de Investimento. Transaction clos- ing, with the consequent inflow of the funds, is expected in the coming days, subject to compli- ance with the usual precedent conditions in this type of transaction.
Funds will be allocated to the company’s lia- bility management, which aims at improving the amortisation profile and reducing the cost of debt, taking into account the deleveraging target provided for in its 2019-2023 Business and Man- agement Plan.
Additionally, Petrobras informs that today, it entered into amendments to the Debt Assump- tion Agreements (IADs) of 2014 (object of the Cession Agreement) and of 2018 with Eletro- bras, in order to release Eletrobras from the obli- gation to offer real guarantees in exchange for new covenants.
Petrobras, September 20 2019
P10
w w w . N E W S B A S E . c o m
Week 38 26•September•2019