Petro-Victory Energy has updated the market on the acquisition and closure of nine (9) onshore oil concessions in Brazil. This acquisition adds 63,583 acres to the Company’s Potiguar Basin portfolio and will offer significant oil development to materially increase its substantial reserves, production and profitability.
Expansion of Portfolio
Petro-Victory has completed the previously-announced purchase of a 100% working interest in nine (9) onshore concessions in the prolific, mature oil-producing, Potiguar Basin in North East Brazil. The POT-T-432, POT-T-434, POT-T-477, POT-T-519, POT-521, POT-T-564, POT-T-566, POT-T-650, and Trapiá concessions, were originally owned by Petrobras. While not in production today, they add a diversified mix of oil and gas field development, appraisal, and exploration opportunities to the Petro-Victory portfolio in Brazil.
This acquisition has been approved by the Agencia Nacional do Petroleo Gas Natural e Biocombustiveis of Brazil ('ANP') and the concession contracts for POT-T-519, POT-521, POT-T-564, POT-T-566, POT-T-650, and Trapiá were executed on March 2nd, 2021. The signing ceremony for POT-T-432, POT-T-434, and POT-T-477 is scheduled for June 7th 2021. Petro-Victory was provisionally awarded these concessions for a cost of R$2,135,802 (~US$393,000) in the Oferta Permanente, which was the first ANP bid round in its history that did not include Petrobras, and where Petro-Victory was the largest winner.
The Petro-Victory technical team has purchased and is reprocessing 3D seismic and evaluating well data and is currently ranking various development prospects. This work is expected to result in material drill ready, low risk, high impact development, appraisal, and exploration prospects across the newly-acquired acreage.
It is management’s opinion that there will be material commercial oil accumulations developed and produced from the existing wells inside the concessions. There are nineteen (19) wells drilled across the former Petrobras concessions, and a full evaluation of the well data has commenced to identify the oil and gas zones in these well bores. Several wells have strong evidence of both oil and gas accumulations (with some of the wells successfully testing oil and gas to surface). Petro-Victory is interpreting the seismic and well data and will work to identify and quantify additional reserves over these concessions to increase the Company’s previously-announced certified reserves.
The company is also in the process of closing seven (7) additional onshore, former Petrobras, concessions in the Potiguar Basin with ANP. On final closing and execution of the concession contracts, an update will be given to the market.
Petro-Victory has identified the mature oil-producing Potiguar Basin as a core area for the Company, and is currently the third largest landholder in this prolific hydrocarbon basin. Over 1 billion barrels of oil have been produced onshore since the first discovery was made in 1979 and the majority of exploration wells were drilled between 1980-1990. Current daily oil production across the Potiguar Basin is ~50,000 BOPD.
Richard F. Gonzalez, Chief Executive Officer of Petro-Victory commented:
'I am pleased with our latest portfolio expansion. This acquisition of former Petrobras concessions, complements and adds to our portfolio of producing, low risk, high impact, cash flow positive assets. We believe this acquisition will materially aggregate significant, profitable production, increase our robust certified reserves and thus, continue to enhance shareholder value.'