Page 19 - LatAmOil Week 41

LatAmOil NEWS IN BRIEF LatAmOil

PERFORMANCE 2020 work programme of $65-75mn ($25-35mn capital allocation process currently underway
during 2H2020) targeting 40,000-42,000 boepd and 2021 work programme and investment
Alvopetro Energy annual average production and operating net- guidelines to be released in November with
backs of $230-260mn assuming Brent of $35-
Q3-2020 results.
announces September 40 per barrel; Fully funded and flexible work GeoPark, October 14 2020
programmes, quickly adaptable to any oil price
production volumes scenario FINANCIAL
Highlights, Capital Strength and Risk Man-
Alvopetro Energy announces September nat- agement Levers: Combination of cost and invest-
ural gas sales from our Caburé Project under ment reductions exceed $290mn across regional Fitch gives Pemex’s
our long-term Gas Sales Agreement (GSA) with platform; $163mn of cash and cash equivalents
Bahiagás. In September, daily sales averaged as of September 30, 2020; $75mn oil prepayment proposed $1bn debt
10.7 mcf (303,010 cubic metres) per day, with facility, with $50mn committed and no amounts
associated condensate sales of 76 barrels per day drawn; $140.3mn in uncommitted credit lines; issue a rating of BB-
(bpd) for combined total sales of 1,859 boepd, Long-term financial debt maturity profile with
based on field estimates. Natural gas deliveries no principal payments until September 2024; Fitch Ratings has assigned a long-term rating
under our GSA commenced on July 5 and have Continuously adding new hedges for the next of BB- to Pemex’s proposed senior unsecured
been consistent through to the end of September, 15 months debt issuance of $1bn. The notes will mature in
averaging 10.1 mcf (*** cubic metres) per day for Highlights, Health and Safety Actions and 2025, and the company expects to use the pro-
the third quarter. Combined with average daily Results: Protocols, preventive measures and ceed from the issuance for capex, working capital
condensate sales of 79 bpd in the third quarter, crisis response plans in place across six-country needs and to refinance existing debt.
Alvopetro achieved total average daily sales of regional platform; Field teams sharply reduced Pemex’s ratings reflect the continued deteri-
1,764 boepd, based on field estimates. to a minimum with back-up teams and contin- oration of the company’s Standalone Credit Pro-
Alvopetro Energy’s vision is to become a gencies in place to keep people working safely file (SCP) to ccc -. The SCP deterioration reflects
leading independent upstream and midstream and production flowing; First company in the the company’s limited flexibility to navigate the
operator in Brazil . Our strategy is to unlock E&P sector to obtain Bureau Veritas certification oil and gas downturn given its elevated tax bur-
the on-shore natural gas potential in the state on biosecurity protocols to mitigate and manage den, high leverage, rising per-barrel lifting costs
of Bahia in Brazil, building off the development the impact of COVID-19 in GeoPark Colombia and high investment needs to maintain produc-
of our Caburé natural gas field and our strategic operations; GeoPark closely engaged with local tion and replenish reserves.
midstream infrastructure. communities implementing an extraordinary Fitch estimates Pemex’s FCF will be approx-
Alvopetro, October 13 2020 range of measures to fight COVID-19 with imately negative $15bn per year during 2020
efforts coordinated at local, regional and federal and 2021. For the first six months of 2020,
GeoPark issues report levels to support and compensate for limited Pemex reported approximately $7bn of negative
local resources.
FCF, consistent with Fitch’s initial assumption.
on Q3-2020 results Streamlining business across portfolio to approximately $37 per barrel,
Highlights, Improving Overall Business: With the current Mexican crude basket price of
GeoPark, a leading independent Latin American improve overall cost structure and take advan- Pemex’s upstream business can cover oper-
oil and gas explorer, operator and consolidator tage of available synergies and new innova- ational and financial half-cycle costs of more
with operations and growth platforms in Colom- tive technologies; Top-to-bottom review in all than $25 per barrel. The upstream business
bia, Peru, Argentina, Brazil, Chile and Ecuador, departments and capabilities – with reorgan- does not generate sufficient cash flow to cover
today announced its operational update for the isation of asset management team and offices before-tax full-cycle costs, including capex, of
three-month period ended September 30, 2020. across region; Released GeoPark’s Environmen- approximately $60 per barrel. Fitch believes the
Highlights, Increasing Production and tal, Social and Governance (ESG) report for 2019 company will need significant government sup-
Re-engaging Work Programme: Consoli- prepared under the Global Reporting Initiative port in the near term.
dated oil and gas production of 38,845 boepd (GRI), available on the Company’s website The moderate linkage between Pemex’s rat-
in Q3-2020, up 5% compared to Q2-2020; Catalysts Q4-2020: CPO-5 block (GeoPark ings and those of the sovereign reflects the delay
Reopening temporary shut-ins and resuming non-operated, 30% WI): Currently drilling the and uncertainty of significant support from the
drilling campaign with three new wells put on Indico 2 appraisal well to be followed by the Agu- government due to Pemex’s financial difficulties
production in the Llanos 34 block (GeoPark ila 1 exploration well; Llanos 94 block (GeoPark resulting from the decline in oil prices. Pemex’s
operated, 45% WI); Producing approximately non-operated, 50% WI): Re-entry into the Stable Outlook reflects that of Mexico.
40,000 boepd by the end of Q3-2020; Full-year Grulla 1 well; 2021 Capital Allocation: GeoPark Fitch Ratings, October 08 2020

Week 41 15•October•2020 www. NEWSBASE .com P19