Page 13 - LatAmOil Week 10 2020

LatAmOil
NEWS IN BRIEF
LatAmOil
INVESTMENT
Petrobras signs agreement
on the sale of stakes in four
onshore fields to Eagle
Petrobras reports that today it signed an agree- ment with Eagle Exploração de Óleo e Gás (Eagle) for the sale of 100% of its stakes in four onshore fields, located in the Tucano Basin, in the countryside of the state of Bahia, for $3.01mn.
The sale price will be paid in two installments: (i) $602,000 as of today; and (ii) $2,408,000 on the closing date of the transaction, subject to adjustments due.
The closing of the transaction is subject to the fulfillment of precedent conditions, such as approvals by the Administrative Council for Economic Defense (CADE) and by the National Agency of Petroleum, Natural Gas and Biofuels (ANP).
The onshore fields called Conceição, Quer- erá, Fazenda Matinha and Fazenda Santa Rosa are located about 110 km from the city of Sal- vador. In 2019, the average production of these fields was around 26 boepday of gas, with no oil production. Upon completion of the sale, Eagle will hold 100% interest in these concessions.
Eagle is a Brazilian oil and gas company and is the upstream arm of the CKL Group, which holds a business portfolio nationwide in the areas of infrastructure, electromechanical works, road concessions, real estate, energy and sanitation. Petrobras, March 09 2020
Petrobras starts binding
phase in sale of stakes in
two exploration blocks
Petrobras reports the beginning of the bind- ing phase related to the sale of part of its stake in exploratory blocks belonging to the BM-PAMA-3 and BM-PAMA-8 concessions, located in the Pará-Maranhão Basin. Those qualified for this phase will receive a process let- ter with detailed instructions on the divestment process, including guidelines for due diligence and submission of binding proposals.
The BM-PAMA-3 concession was acquired in the 3rd ANP Bid Round by Petrobras (100%) and is currently in the appraisal phase, due to the discovery made in well 1-BRSA-903-PAS (Harpia).
The BM-PAMA-8 concession, which com- prises the PAMA-M-192 and PAMA-M-194 blocks, was acquired in the 6th ANP Bid Round. It currently belongs to the consortium formed by Petrobras (operator, 80%) and Sinopec
Exploration and Production (Brazil) (20%) and is in the 2nd Exploratory Period.
Petrobras, March 06 2020
FINANCE
Peru: PetroTal provides liquidity update
PetroTal, the Peruvian focused E&P company, notes the following in relation to the global retraction in oil prices, and global market decline. All currency amounts are in US dollars.
Financial Impact: In response to the sud- den reduction in the Brent oil price, PetroTal has completed a sensitivity assessment of funds available from operations (netback) at varying oil price levels. As noted in its February corpo- rate presentation, Bretaña’s netback at 15,000 barrels per day (bpd) of oil was 55% of the Brent oil price at $65 per barrel and decreases to 37% at the Brent oil price of $30 per barrel.
In some of our contracts, as Brent oil prices drop below $50 per barrel, PetroTal is entitled to negotiate lower fees and tariffs to stabilise net- backs. These graduated cost reductions serve to increase netbacks by approximately $3 per barrel at $30 Brent.
Each barrel of oil production contributes pos- itively towards funding all administrative costs and the Company’s capital investments. PetroTal has the benefit of not having any debt or interest expenses, and no concerns about loan covenants.
Since PetroTal maintains significant invest- ment programme flexibility, it has the ability to be resilient and ensure that it balances cash flow with expenditures. The Company’s previously announced $99mn capital investment pro- gramme is weighted to the last half of the year and will continue to be monitored closely in light of the reduced oil price environment. Further- more, given the strong relationship PetroTal has with its key contractors, the Company has agreed to manage payments with a number of its con- tractors, allowing for ongoing operation of the contractors’ crews.
Manolo Zúñiga, President and CEO, com- mented: “PetroTal remains confident in its ability to manage oil price fluctuations through a disciplined financial approach. Our assess- ments show that, based on current projections and pricing environment, the Company will remain cash flow positive this year. Importantly, if the global oil price retraction continues for an extended period, PetroTal has the flexibility to defer capital investment. At this stage, our 2020 oil production guidance remains in effect, and the expected success of the 6H well will contrib- ute significantly towards our target.”
PetroTal, March 10 2020
Bahamas Petroleum
announces funding
strategy update
Bahamas Petroleum Company, the oil and gas exploration company with significant prospec- tive resources in licences in The Commonwealth of The Bahamas, has provided the following update in relation to its financing strategy for the drilling of Perseverance-1, its first exploration well to be drilled in The Bahamas.
Highlights: Company and the parties to the Conditional Convertible Note Agreement agree extension of date for satisfaction or waiver of all conditions precedent and election to sub- scribe to April 15, 2020, which in defined cir- cumstances may be further extended to May 15, 2020; circumstances agreed in which the Company (at its sole option) can scale back the amount of the Convertible Notes by up to 50%, at no cost or penalty, should more advantageous financing become available; and subscribers for the Convertible Notes have elected to exercise some of their options and have made payment to the Company in respect of that exercise.
On October 10, 2019, the Company entered into a subscription agreement in relation to a conditional convertible loan note investment of GBP10.25mn.
On January 30, 2020, the date for the satis- faction or waiver of the conditions precedent to draw-down of the Conditional Notes was var- ied from February 15, 2020, to March 9, 2020, with all other terms and conditions remaining unchanged.
As at today, two substantive conditions prec- edent remain unfulfilled: formal placement of an insurance policy for drilling operations (the Company has to date received a number of proposals from globally recognised lead insur- ers, which are presently being evaluated, place- ment of an insurance policy in any event being a pre-requisite for mobilisation of a rig to site); and entry into a definitive contract for provision of a drilling rig.
A number of other more procedural condi- tions also remain to be satisfied, including: the Company entering into a long-form master ser- vices agreement for integrated well services - the final form of which has already been agreed with the relevant service provider; and the Company reaching final agreement with the Government of The Bahamas on remaining licence fees (if any) that may be payable until the end of the current licence period (December 31, 2020), it being noted that within the Environmental Authorisation (as announced by the Company on February 27, 2020) a process has been estab- lished for this to occur within 60 days of the date of that Environmental Authorisation.
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