Petro Rio S.A. ADR fka HRPTY

[DrillaHill]

MATERIAL FACT: PURCHASE OF ADDITIONAL INTEREST IN BRASOIL
ir.petroriosa.com.br/download_arquivos.asp?id_arquivo=D7CB340A-EFF1-4B13-A29E-5DF08BE2ED53 (02/01/2017)
Rio de Janeiro, January 2nd, 2017 – PetroRio, (“Company” or “PetroRio”) (BM&FBOVESPA: PRIO3, TSX-V: PRJ), hereby informs the execution of a Share Purchase Agreement aiming to acquire an additional direct interest of approximately 29.21% held by Fundo Brascan de Petróleo, Gás e Energia – Fundo de Investimento em Participações (“FIP Brascan”) in Brasoil do Brasil Exploração Petrolífera S.A. (“Brasoil”).
The conclusion of this transaction in connection with the acquisition of the indirect participation held by Goldman Sachs & Co. (“GS”), which was announced on December 21st, 2016, will give to PetroRio a total participation in Brasoil of 52.40%.
Brasoil is a holding company, with indirect stake of 10% over the rights and obligations of the Manati Field concession contract, that, in turn, currently produces 4.1 million cubic meters of natural gas per day (approximately 26 thousand barrels of oil equivalent per day), ranking as the 8th largest producing field of natural gas in Brazil (*).
Additionally to the stake in the Manati Field, other relevant assets from Brasoil include the indirect stake of 100% in the concessions of the Pirapema Field – gas asset currently in development – and of Block FZA-M-254, both in the mouth of the Amazon River.
The closing of the sale and purchase transaction between PetroRio and FIP Brascan is subject to certain conditions precedent, among which, the approval by the investment committee of FIP Brascan and the period for exercise of the right of first offer and tag along by the remaining investors of Brasoil, additional to the analysis of the transaction by the competent regulatory bodies, as deemed necessary.
The execution of this agreement is aligned with the Company's business model and acquisition growth strategy and it represents a diversification of its portfolio of revenue generating assets.
(*) As per the October, 2016 Oil and Natural Gas Production Buletin (Boletim da Produção de Petróleo e Gás Natural) of the Brazilian Oil and Natural Gas Agency (Agência Nacional do Petróleo, Gás Naturals e Biocombustíveis – ANP).