Petro-Victory Receives Development Drilling Permits and Advances Drilling Program in Brazil

Source: 3/23/2022, Location: South America

Petro-Victory Energy Corp. is pleased to provide an operational update on the status of activity on its portfolio onshore Brazil. Following completion of the Company’s recent private placement, environmental drilling permits have been secured for a total of 6 development wells from Brazil’s Environmental Agency, Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis (IBAMA). Securing the necessary environmental permits significantly progresses readiness for the planned 2022 program of 4 wells and additional workovers at Trapia and São João and provides further optionality for future drilling.

- Environmental permits secured for 6 drilling locations at Andorinha field, onshore Brazil;
- Company in advanced negotiations for a drilling rig contractor to secure a rig to be used for drilling and testing of 4 new wells at Andorinha and workovers at Trapia and São João;
- Well program at Andorinha targeting proved plus probable reserves of 485,000 barrels of oil and c.US$16 million of NPV10 value as identified in the Company’s 2020 Reserve Report; and
- Drilling rig contract to run for the remainder of 2022 with options to extend.

Environmental Permits
The Company has secured drilling permits for 6 development wells at its Andorinha field in the Potiguar Basin, onshore Brazil. The permits cover the first 3 wells planned for the 2022 drilling program (PVE-01, PVE-02, PVE-03), with 3 additional locations also approved (PVE-06, PVE-08, and PVE-15). The environmental approval for the fourth planned location for the 2022 drilling program, GALP-06, a re-entry/redrill, is currently pending and expected shortly.

Environmental permit approvals are a long-lead item for well operations onshore Brazil therefore to have these in place significantly de-risks the timeline for the 2022 drilling campaign. Petro-Victory’s long history in-country, detailed understanding of the permitting processes and advanced planning has ensured that this critical hurdle was achieved in good time for drilling and development activity this year.

Rig Contract
In parallel with progressing the environmental approvals and since completing the recent private placement, Petro-Victory is now in advanced discussions to secure a drilling rig for a 4 well drilling program at Andorinha, targeting a Q2 mobilization to the field.

The rig will initially be used for drilling and testing of 4 new wells at Andorinha: PVE-01, PVE-02, PVE-03 and GALP-06 (subject to environmental permit).

These wells are targeting proved plus probable reserves of 485,000 barrels of oil and c.US$16 million in NPV value, according to the Company’s December 31, 2020 reserve report, produced by GLJ.

In addition to the development wells planned at Andorinha, the Company will take the rig to the Trapia field and re-enter up to 3 abandoned wells to evaluate a potential gas discovery. Following the work at Trapia and Andorinha, and subject to ANP approval, Petro-Victory will then move the rig to the producing Sao Joao field in the State of Maranhao to re-enter a number of abandoned wells in order to increase oil production.

Petro-Victory will update the market upon signing of the rig contract and provide a firm drilling timetable.

Richard Gonzalez, Petro-Victory CEO commented:
?“I’m delighted to announce these significant steps forward in relation to our work program for this year. Following on from securing funding in a significantly oversubscribed private placement, the Company has now received environmental permits for 6 drilling locations providing a clear milestone to de-risk operational timelines for our well campaign. It is testament to our long-standing history in country and the hard work of our team on the ground in Brazil that we have been able to secure these time-critical permits. The Company will now progress with finalizing its contracting arrangements for our 2022 work program and we look forward to updating the market on the final timetable in due course.”

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