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Thanks, Drilla, and I also wish you a very happy New Year.
I'm sorry to learn that you are 'leaving us'. You've been a great source of information and sound analysis on HRT/Petrorio throughout these last few years.
I understand that you also hold shares in other companies in the oil and gas sector, so I'm here to wish you further success (and fun!) as an investor.
About the obstacles to trade on Bovespa, I'd be glad to try and be helpful in case you have any remaining questions on the matter, since I'm in Brazil and am familiar with a number of brokers.
Take care!
Many thanks, DrillaHill, for posting the link to the interview of Nelson Tanure and Renato Jerusalmi at World Finance. Excellent update.
Drill,
a great post of yours. And a very welcome announcement by PetroRio Administration's team. Share-buy-back of this size and at this price level can have a substancial impact on share valuation, while, at the same time, not causing even the smallest ripple on the company's strong finances.
Great post Drill. Many thanks and all the best to you!
Clear sign that the Government of Namibia continues to show interest in foreign companies participation in the exploration of its oil resources.
Global Petroleum granted Namibia Licence renewal Thursday, Nov 12, 2015
Global Petroleum Limited - AIM: GBP, ASX: GBP - the oil and gas exploration company presently focused on emerging plays in Africa and the Mediterranean, is pleased to announce today that its wholly owned subsidiary, Jupiter Petroleum (Namibia) Limited ("Jupiter"), has agreed with the Namibian Ministry of Mines and Energy ('MME') a First Renewal Period (" the Renewal Period") of 24 months from 3 December 2015 for Petroleum Exploration Licence No. 29 ("the Licence"), which covers two Blocks, 1910B and 2010A, in the Walvis Basin offshore Namibia.
The Licence originally provided for a commitment to drill one well during the Renewal Period. Given prevailing market conditions, which are having a particularly negative impact on frontier exploration both in Africa and more generally, the Company and MME have agreed a revised Minimum Work Programme which involves:
1. The reprocessing of all existing 2D seismic lines across that portion of the Licence Area which is retained following the mandatory 50% relinquishment; and
2. Acquisition of 800km of long offset 2D over the retained acreage. The reprocessed existing 2D data will be used to assist with the design and location of the new survey.
Accordingly, there is now no well commitment during the two year term of the Renewal Period.
As previously reported, the Company has this year completed further modelling of the prospects within the Licence Area using both seismic and gravity data. The results of this combined seismic and gravity work has proved to be very encouraging with regard to hydrocarbon potential. The work has increased confidence in a syn-rift oil play in the outboard or deep water region and the likely presence of both reservoir and source. In Global's view, this has significantly upgraded the overall prospectivity of the acreage, and has clearly facilitated the selection of the areas to be relinquished.
Jupiter remains operator with an 85% interest in the two blocks, with partners NAMCOR and Bronze Investments Pty Ltd holding 10% and 5% respectively, both as carried interests.
Global's CEO, Peter Hill, commented: "We would like to thank the Ministry of Mines and Energy in Namibia for their commercial and practical approach to concluding this Agreement. From our side, we are pleased that we will be able to retain what we believe to be the more prospective half of our acreage, containing the most exciting prospects."
"Whilst we continue to seek potential new opportunities, we also firmly believe that our position in Namibia has the potential to be rewarding for shareholders. After initially disappointing drilling results, we believe there is renewed interest in exploration offshore Namibia with the possibility that major players may take positions in offshore acreage in the coming months. Following our recent work, we regard our own acreage as being amongst the most exciting in the country, and the new commercial terms announced today will enable us to progress exploration on the block without over-commitment. Accordingly we are very happy to have renewed our Licence on the revised terms."
For more information, please visit: www.investegate.co.uk"
Wood Group wins PetroRio contract in Brazil
1/7/2016
ABERDEEN, Scotland -- Wood Group has been awarded a new contract by PetroRio to deliver services to the Polvo A platform, in the southern Campos basin, approximately 100 km off the coast of Rio de Janeiro. Integrated operations and maintenance services will be provided by Wood Group PSN under the two-year contract, which is effective immediately.
The contract builds on Wood Group’s experience supporting Polvo field, which consists of a fixed production and drilling platform connected to a floating production, storage and offloading vessel. Wood Group Kenny has held two contracts to provide integrity management support to the field, the most recent of which completed in early 2015.
“Our experience operating in Brazil, alongside our strong history of supporting offshore assets across their life cycle in the North Sea, positions us well and we are committed to leveraging our knowledge and expertise to optimize the productivity of the Polvo A platform,” Robin Watson, chief executive of Wood Group, said.
Another good day for PetroRio at the Bovespa Sao Paulo Exchange. Up close to 2%, while the other oilies faired rather poorly. Trading now in a breakout mood, trending clearly North.
Brent in good recovery mood today. With all the growth in Asia (India, mainly), the good signs in the North American markets, Europe not too far behind, guess what, these discounted energy prices should not last.
PetroRio up 3% today at the Bovespa Sao Paulo exchange. Very nice, specially so if one compares with the other oilies. Future looking brighter.
PetroRio closed today up more than 4% (at Bovespa Sao Paulo exchange) while the other oil players ended down or close to break even. All the more positive since quarterly results are expected any minute now.
Brent today showing considerable strength, edging higher as in the past few days. As we approach winter in the richer areas of the Northern Hemisphere, demand for heating oil should further boost prices.
Up almost 7% today in the Bovespa São Paulo stock exchange on well above average volume traded.
News out today from PetroRio about increase in participation by almost 3 million aditional shares (debentures converted) by "Bridge", resulting in 14% ownership. According to the company, Bridge now owns 8.800.000 shares (in round numbers) of PetroRio. If that math holds, then PetroRio will have now around 63.0000.000 shares outstanding (a bit more than double the original number before the debentures conversion).
This links to more positive commentary on the news of PetroRio's upgrade to level "A" operator by ANP:
http://www.petronoticias.com.br/archives/76520
(news article dated November 1st, 2015, in Port.)
You are absolutely right, Drill. One year of lock up for the converted shares. In my opinion it is not a done deal that all debentures will be converted. And even if they are, PetroRio as an investment case with all its assets and cash position is one not too hard to prove.
Brent price action today continues to draw a pretty nice picture for oil producers, junior and majors alike. We might soon be closer to "60" than we ever were to "30" (during the direst predictions) in the last twelve months or so.
The "Valor Econômico" (main Braz. newspaper on economy and finance) also reported about this important news, on its Oct 29th, 2015 edition. It said PetroRio already had a "B" license from ANP. With the upgrade to "A" the company enters a whole new ball game.
Thanks Drill for the information (Polvo and B&S oil fields August'15 production).
Prio3 up today again in Brazil. Brent slowly but likewise going up, recovering from recent lows. Good signs for the last quarter of 2015.
Chinese economy oil dependence to boost oil demand. Refinery activity also on the increase.
http://www.bloomberg.com/news/articles/2015-09-24/global-oil-market-gets-new-chinese-traders-hungry-to-taste-crude
According to Bloomberg (www.bloomberg.com) today, the oil glut that was seen in the last 12 months or so about to end.
Brent price showing signs of a steady recovery.
Drill,
just read this post. I think you have a point. Plus the fact that GDS holders were denied the chance of buying debentures should leave the company (Petro Rio) in a somewhat shaky ground, from the judicial perspective, both in Brazil and even more so in Canada. Not setting good governance example here, least we can say.
Drill,
thanks for the sugestion. It so happens that the management of Petro Rio has its mind set on a certain strategy which is being followed with much discipline and sophistication. They speak through their actions and moves, some of them quite smart (like buying 100% of Bijupira Salema oil fields, with almost no cash up front). Let's continue to follow closely further developments. Even with some (or a lot of) dilution, I for one don't plan to jump ship even with brent at current low levels.
That's what looks like being in the cards (I hope to be contradicted by a more positive outcome, one in which not all debentures will be converted and the dilution impact will be small; unlikely though).
Agreed. On the other hand, at todays prices, PRIO3 is clearly very cheap, no matter the coming (and probable) dilution.
Thanks Drill for another great post.
PetroRio will host a conference call (second quarter results of 2015) on Monday, Aug 31st, 2015.
"Teleconferência em Português Teleconferência em Inglês
3PM (Horário de Brasília)
2PM (Nova Iorque)
Tel.: +55 11 3193-1001
+ 55 11 2820-4001
Senha: PetroRio
Webcast: clique aqui 2PM (Nova Iorque)
3PM (Horário de Brasília)
Tel.: +1 786 924-6977
Toll Free (USA): +1 888 700-0802
Password: PetroRio
Webcast: clique aqui
.A Teleconferência será conduzida em Português com tradução simultânea para o Inglês."
Brent prices recovering well for the month. Might have just seen bottom.
Strong cash position, the more so if and when oil prices recover (matter of fact "when" oil recovers, as it seems reasonable to expect).
"SHELL 2014 Average Production Costs in Brazil US$25.26/boe".
In the Polvo operation PetroRio managed to bring downs costs. It would not come as a surprise if it did the same once it becomes operator of the Shell fields.
Suppose the costs remain the same though at US$25.26, and oil continues to hover around US$65: Bijupirá and Salema will make a huge positive difference in the company's bottom line
Well said, Drill, thanks. By the way, if the licenses are indeed renewed, Meerkat is a stellar target to be explored. It was scheduled to be drilled in the HRT 2013 campaign, but the company had a last minute change of heart and postponed the drill until second notice. Hope it goes on with the plan (to drill the prospects), this time as a minor stakeholder, fully "carried" by a major.
BUSINESS - | 2015-06-04
Shell acquires more interest in exploration licence
By Staff Reporter
SHELL Namibia Upstream BV has acquired an interest in Petroleum Exploration Licence 39 located offshore Namibia.
“We have subsequently conducted seismic tests and the results are being analysed. Shell opened a Windhoek-based office and has been hard at work getting to know the Namibian people. We have also investments in a number of community programmes and initiatives, oil, gas skills development, marine conservation and science education,” the company said.
Shell said on its website that it has acquired a 90% controlling interest in petroleum exploration licence 39 with the additional 10% interest held by the National Petroleum Corporation of Namibia.
- See more at: http://www.namibian.com.na/indexx.php?id=27421#sthash.wdPabS2y.dpuf
http://www.namibian.com.na/indexx.php?id=27421#
Drill, it makes perfect sense. Costs arising from Bijupirá and Salema ought to have been included in the acquisition price.
NEWS RELEASE
PETRORIO: UPDATE ON ACQUISITION OF THE BIJUPIRÁ
AND SALEMA OIL FIELDS AND FPSO FLUMINENSE
Rio de Janeiro, May 27, 2015 – PetroRio1
(or the “Company”) (BM&FBOVESPA: HRTP3,
TSX-V: HRP), announces the results of the geological report received from an external
consultant hired by PetroRio respecting the Bijupirá and Salema Fields. As previously
disclosed (by Material Fact dated February 13, 2015), the Company has proposed to acquire
80% of the rights and obligations of the concession contracts for the Bijupirá and Salema
Fields – Petróleo Brasileiro S.A. - Petrobras holds the remaining 20%. The transaction also
involves the acquisition of, among other assets, the FPSO Fluminense, used in the
production process of both fields, with storage capacity for 1.3 million barrels of oil.
Proved developed producing and proved plus probable reserves attributable to the interests
in the Bijupirá and Salema Fields to be acquired by the Company were evaluated effective
January 1, 2015 by Rose & Associates, LLP, an independent qualified reserves evaluator
hired by PetroRio, in accordance with the requirements under National Instrument 51-101
(the "Rose Report") and are 24.5 million BOE, of which 71% (17.4 million BOE) are proved
developed producing reserves. The before tax net present
value (discounted at 10%) of the future cash flow attributable to total proved and probable
reserves is approximately US$570.6 million.
file:///C:/Users/CYBER04/Downloads/2015.05.27%20Announcing%20Reserves%20ENGL.pdf
That's a great contribution Drill, for all of us who follow the fundamentals of PetroRio.
(Reuters, April 21st, 2015) - World oil prices will rise "substantially" in the coming months after hitting the bottom of a months-long rout several weeks ago, with a supply squeeze looming as early as this summer, according to PIRA Energy's Gary Ross.
The "magic of price" has caused a rapid resurgence in global oil demand and triggered a surprisingly steep collapse in the number of U.S. drilling rigs that may be more difficult to reverse than many expect, Ross, a founder and executive chairman of influential consultants PIRA Energy Group, told Reuters in an interview.
And Saudi Arabia's spare production capacity has dwindled as the kingdom pumps oil at a record rate, leaving the global market facing a summer of higher demand and growing geopolitical risks with a spare supply cushion of as little as 700,000 barrels per day (bpd), or around 0.7 percent of the market.
"The world has been focused for the last six months on destroying supply," Ross said on Monday. "Increasingly the mindset is going to change, they’ll have to start thinking about creating supply again, and that’s going to mean a lot higher prices than today. Substantially higher."
To see a video of the interview: reut.rs/1DxWk93
PIRA, one of the first big energy consultancies to anticipate the tumble in oil prices last fall, is among others, including big commodity traders Gunvor and Vitol, in calling a bottom, despite U.S. crude stocks that have swollen to record levels more than 20 percent higher than last year.
"The balance is getting tighter and while we’ve accumulated quite a bit of inventory, and we may accumulate a bit more, the worst is pretty much over," said Ross.
Beyond calling the bottom, however, Ross is taking a more bullish view than some analysts who have warned of a prolonged lull or a new slump to as low as $20.
“Prices are way too low; they can’t last, especially with such small spare capacity," he said.
U.S. oil prices have rebounded some 35 percent, or as much as $15 a barrel, since hitting a six-year low of nearly $42 a barrel in mid-March, still too little to "turn around the freight train of declining rigs in the United States," Ross said.
He declined to give PIRA's specific price forecasts. On average, analysts surveyed by Reuters in March expected U.S. prices to average $59.20 a barrel this year; the highest forecast was for $75..
The dramatic emergence of the U.S. shale industry has fostered the notion that the intense, years-long boom and bust cycles that have plagued the global oil sector for decades may be changing, with thousands of fast-producing shale wells able to shorten the cycle and temper the peaks and troughs.
While the industry has slashed costs, staff and rigs more quickly than anticipated as oil prices more than halved since last summer, their ability to get back in gear may be tested as soon as this year as demand revives and reserves diminish.
Ross estimates that global spare production capacity has already fallen to just 1.2 million bpd, one of the thinnest cushions ever. And Saudi Arabia may need to pump another 500,000 to 600,000 bpd of crude this summer to meet domestic demand for additional power generation, shrinking it further.
Will shale drillers ride to the rescue?
“They’ve just cut 100,000 jobs," Ross said. "You think those people are just waiting for a phone call to come back to work?”
Drill,
right on and crystal clear!
Stats and map tell the story very well indeed..
Petrobras anounces new discovery of oil and gas in the Amazon basin (not Solimoes basin per se, but in the Amazon region all the same, pls check map included in the repport). Light oil with API 47º:
http://www.oilandgastechnology.net/upstream-news/petrobras-cheers-double-discovery-onshore-brazil
Used to extract oil in the icy waters of the Arctic, the Russian Rosneft is determined to venturing into the world's tropical forest to sell natural gas to Brazilian consumers.
When the consortium formed by Russian Rosneft and the Brazilian HRT complete the natural gas marketing plans discovered in the Solimões Basin, the Amazon will undoubtedly be a memorable event for the Brazilian energy sector. This is to extract large volumes of natural gas embedded more than 3000 m depth in a sedimentary basin without infrastructure in the heart of the Amazon. And take them to consumers hundreds of miles away.
Today the project comes down to 18 exploration blocks in which were made seven discoveries of natural gas with capacity to produce up to 7 million m3 per day. Perched on the studies are HRT, national oil company that invested in pioneering the Solimões Basin; Russia's Rosneft, the largest oil company in the world of open capital in production volume and operator of the consortium; and Petrobras, which also has gas discovered in neighboring concessions in the Solimões.
In July, the companies signed a new agreement to fund studies for the project, with a term of 12 months.
Rosneft working with two scenarios: to generate electricity or liquefy natural gas and export it in the Amazon region by boats. The volume to be produced, by the way, is not defined. While still operating, HRT even issued that tests showed a capacity to produce up to 7 million m3 per day, but it is early to say that this will be the design of the final production system.
This step will be fulfilled after the completion of the exploration phase that will bring reliable data on the capacity of reservoirs. "We are considering various scales of production and will select which gives a great economic return," Rosneft said in a statement.
River LNG
Whatever the volume, without proper roads, a terrestrial virtual pipeline is not feasible. One option, then, is to build an LNG plant in the operating area and drain the product through ferries, scaled to navigate the nearby rivers, as Tefé and Urucu. Petrobras itself used this alternative in the past, but to transport oil, which need not be liquefied.
Another option is to build a pipeline to a terminal where the gas loading was done in vessels. As the terminal would be located in most rivers navigability - the closest is the Solimões - the idea is to supply larger ships to enable the export of LNG.
By the way, the river transport is already used in the region. The 248 km of Urucu province, Transpetro operates the terminal Coari, Petrobras, with a capacity to store 79,000 m3 of liquid, 60 thousand m3 of oil and the rest of LPG. The unit is in the Solimões River and is connected by pipeline to Orsol Polo Ararat, where it is treated the production of Urucu cluster.
In the world, there are now in operation vessels capable of storing 36,000 m3 of LNG and giants with more than 220 thousand m3. Being in the Amazon, it takes into account that the LNG market in the North Atlantic has important routes such as the Caribbean gas exports to the US and Europe, which reached 4.2 billion m3 in 2013, according to BP Statistical Review of this year.
Not to mention the Brazilian regasification capacity in the states of Ceará, Bahia and Rio de Janeiro respectively, in the Amazon order of proximity. The terminals belong to Petrobras and add 41,000 m3 per day of regasification capacity.
Thermal Solution
Burning natural gas in the Solimões a thermal is seen by Rosneft as the solution with the lowest environmental impact of all alternatives.
"The project will have to align all the various stakeholders in the Brazilian energy sector," he said Rosneft in response to Brazil Energy. The main challenge will be to connect a UTE to the basic network in Manaus, winning over 500 km of jungle. In 2013, the transmission line Tucuruí-Macapá-Manaus interconnected Amazonas, Amapá and western Pará the National Interconnected System (SIN).
Excerpts from: Revista Brasil Energia ("Brazil Energy Magazine")
NEWS RELEASE
UPDATE ON ACQUISITION OF THE BIJUPIRÁ AND
SALEMA OIL FIELDS AND FPSO FLUMINENSE
Rio de Janeiro, March 16th, 2015 - PetroRio,the new brand of HRT Participações em Petróleo S.A., (the "Company" or "PetroRio") (BM&FBOVESPA: HRTP31, TSX-V: HRP1), announces an update on the expected timing of the geological report to be filed with the TSX Venture Exchange ("TSX-V") in connection with the proposed acquisition of 80% of the rights and obligations of the concession contracts for the Bijupirá and Salema Fields and the FPSO Fluminense.
As previously disclosed (by Material Fact dated February 13, 2015), the Company has retained an independent qualified reserves evaluator to prepare a geological report in compliance with the Canadian Securities Administrators‘ National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (the "Report"). The Report is now expected to be received on or about March 20, 2015. The Report will be used by the TSX-V as supporting documentation for the proposed transaction, and it is expected that the Report will assist investors in assessing the proposed transaction. A further news release will be issued by the Company when the Report is available, providing further details on the assets proposed to be acquired under the agreements. Investors are cautioned that, until the Report is prepared and disclosed, there may not be sufficient information about the assets so as to enable investors to make a reasonable investment decision about the transaction.
The completion of the proposed acquisition is subject to certain conditions precedent, including approval of the assignment of rights by Brazil’s Council for Economic Defense (CADE) and the National Agency of Petroleum, Natural Gas and Biofuels (ANP). Receipt of required regulatory approvals and the subsequent Closing may take several months, or may not occur at all.
PetroRio is born of a new corporate culture focused on increasing production through the acquisition of production assets, the re-exploration and optimization of the Polvo, Bijupirá and Salema Fields, increasing operational efficiency and reducing production costs and corporate expenses, as well as eliminating exploration risk. The Company’s main objective is to create value for its shareholders, protecting its liquidity and increasing revenue and profits, with full respect for safety and the environment.
For additional information, please contact PetroRio’s Investor Relations Department.