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Petro-Victory Energy Completes Acquisition of Oil Assets in Brazil

Source: www.gulfoilandgas.com 9/4/2018, Location: South America

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Petro-Victory Energy Corp. (VRY), (Petro-Victory), an acquirer and developer of oil and gas assets, is pleased to announce a US $1.6 million acquisition of production and working interests in 4 oil fields, comprised of 12,850 gross acres, located within three developed onshore basins in Brazil, and commits capital to materially expand production. The acquisition was financed using the company's existing US $10.0 million credit facility.

Highlights

- US $1.6 million acquisition cost (US $125 per acre). US $0.375 million paid at signing, US $1.225 million paid upon Agencia Nacional do Petroleo Gas Natural e Biocombustiveis of Brazil (ANP) approval.
- Acquisition consists of:
- 100% operating interest in the Andorinha onshore producing oil field in the Potiguar Basin
- 100% operating interest in the Alto Alegre onshore oil field in the Potiguar Basin
- 50% non-operating interest in the Carapitanga producing onshore oil field in the Sergipe-Alagoas Basin
- 50% non-operating interest in the Sa?o Joa?o onshore oil field in the Barreirinhas Basin

- Existing infrastructure acquired includes 21 drilled wells, pipelines, power generation and electrical lines, pumping units, paved roads, storage tanks, 3D and 2D seismic with a combined estimated cost of >US $50 million
- Seismic and well data will be used to construct a new development plan. Initial work has indicated significant upside opportunities.
- Potential for new wells to materially increase production. Management estimates the 4 fields have the potential to achieve >1,000 BOPD.
- Near term well recompletions estimated to increase net production to >100 BOPD
- Q2 2018 average production of 20 BOPD from four mature wells in the two producing fields, Andorinha and Carapitanga
- The company acquired the producing assets from Empresa de Engenharia de Petroleo Ltda. (ENGEPET) and has an operating partnership with ENGEPET to optimize field production for Carapitanga and Sao Joao fields.
- Transaction subject to approval from Agencia Nacional do Petroleo Gas Natural e Biocombustiveis of Brazil (ANP). The Acquisition has been conditionally approved by the TSX Venture Exchange (the TSXV) but is subject to final approval of the TSXV.

Richard Lane, Chief Operating Officer of Petro-Victory said, "These fields are located in mature, oil prone basins, with well understood geology and low geological risk. Reservoirs are of excellent quality and our hydrocarbon pay zones are at shallow depths (1-1.5km) allowing for low cost development drilling. The fields produce excellent quality light sweet crude with no impurities, meaning we can achieve a higher price for crude sold".

Richard F. Gonzalez, Chief Executive Officer of Petro-Victory said, "This acquisition positions us in Brazil at a time when onshore oil and gas investment is poised for revitalization. The market opportunity in Brazil has become more attractive with improvements in the economy as well as a move higher in oil prices. We are excited as we leverage long-term relationships within Brazil that present opportunities that fit Petro-Victory's growth and returns focused strategy. Our acquisition and expected capital costs will generate strong margins and cash flows".

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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