"PetroRio will become the sole operator of the BJSA, with effective date as of January 1, 2015, after approval by ANP for the acquisition of the rights and obligations of these fields’ concession contracts."
Effective date of acquisitions was January 2015, so every Barrel produced from Bijupira & Salema is already generating cash and reducing the acquisition price. Considering Production Costs of US$25 to US$35 a Barrel, an average 2015 Sale Price of US$55 per Barrel and BJ&SA Production Volume of 4,000,000bbl (Jan-Aug2015), then PetroRio may have already reduced acquisition costs by US$80 million to US$120 million! The same applies to Polvo field and the ongoing acquisition of Maersk's 40% interest. I don't know the effective date of the acquisition, nor the acquisition price, but the deal was announced in July 2014 and Polvo has produced ~3,754,930bbl (100%) between July 2014 and August 2015, so the acquisition price should have also been significantly reduced by cash generated from Maersk's share of production volume which was ~1,501,972bbl (40%).
2Q15 Earnings Conference Call Transcript "Our lifting cost for the quarter was US$33 a barrel. We are delighted with this result, not just because we have succeeded in cutting costs but also because of the natural depreciation of the currency, a factor which complicates the sums even more. For example, in 2014 the Company had to sell oil at US$95, less a US$10 discount, giving revenues of US$85, when Brent was at US$95. And practically all this money went to pay expenses, for Polvo, for projects, and for our corporate needs. If we had the same cost structure now as we did in 2014, with the oil price at US$50 a barrel, as it is today, the Company would be burning cash at a substantial rate. Fortunately our management saw the fall in the Brent price coming, and cut costs to the bone, so that we have now achieved this level of US$33 per barrel. We believe that the acquisition of Bijupirá and Salema will alter the makeup of the Company’s costs. We shall have a second asset to dilute our corporate expenses, and the margin on Bijupirá and Salema is higher than for Polvo; on one hand because the oil discount price is lower, varying in the range of US$4, while for Polvo it is US$10; and also because at Bijupirá we own the FPSO, and so do not have to pay to lease the equipment. Here we are talking about a cost of more or less US$25 a Barrel for Bijupirá and Salema, which is approximately what Shell has been paying. If we consider the potential cost cuts that we have applied at Polvo, the sky is really the limit."
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