Petro-Victory Energy Corp. said it has started its drilling campaign of the AND-5 well at the Andorinha Field in the Potiguar Basin of Rio Grande do Norte, Brazil.
The well represents the first of two fully funded drilling programs in the Andorinha field under Petro-Victory’s strategic partnership with Azevedo & Travassos Energia, the company said in a news release.
The well targets the Açu and Alagamar formations at a targeted total depth of approximately 3.862 feet (1,177 meters). The company owns 100 percent interest in the Andorinha Field, according to the release.
Closing of Capixaba Energia Asset Acquisition
Meanwhile, Petro-Victory said it closed its acquisition of producing oil and gas asset Capixaba Energia LTDA, generating substantial free cash flow in the Espírito Santo Basin.
The acquisition was completed in partnership with its strategic partner BlueOak Investments, the company said in a separate statement. The acquisition marks the first successful transaction under the partnership.
BlueOak fully funded the initial payments for the transaction price of $17.5 million and committed additional capital expenditures to enhance production and operational efficiency.
The acquisition includes four oil fields in the Espírito Santo Basin, including the Lagoa Parda Cluster, plus two exploration blocks adjacent to major producers, according to the statement.
Petro-Victory CEO Richard Gonzalez said, “The closing of the Capixaba Energia acquisition marks a major milestone for Petro-Victory and a testament to the strength of our strategic partnership with BlueOak Investments. This transaction enhances our operational position in Brazil, delivering immediate positive cash flowing production, critical infrastructure, and significant future upside. With BlueOak’s financial backing and our operational expertise, we are well-positioned to unlock value, optimize profitability, production, and drive long-term growth for our shareholders”.
BlueOak CEO Meton Morais said, “Our partnership with Petro-Victory reflects our long-term conviction in the Brazilian energy market and our belief in the value that disciplined, performance-driven investment can unlock. Capixaba Energia represents the kind of asset we seek—profitable, producing, scalable production that is strategically located. We’re proud to back this transaction and look forward to accelerating growth through continued collaboration with Petro-Victory”.
Petro-Victory said it plans to leverage the” flexible, performance-based joint venture model to unlock value and capitalize on accelerated [merger and acquisition] opportunities across Brazil’s onshore sector. Despite macro uncertainty and commodity price volatility, the company said it has “positioned itself to grow by securing low-risk, high-upside assets with premier industry partners”.
Under the terms of the joint venture agreement, Petro-Victory said it will initially hold a nominal equity position, increasing to 20 percent and then to 50 percent upon achieving key performance milestones. The company will serve as operator of the assets.
The assets have a current output of approximately 400 barrels of oil equivalent per day (boepd), consisting of 88 percent oil, with expectations to grow substantially within the next 12 to 18 months following a detailed and planned workover and drilling campaign targeting proven reserves, the company said.
According to the latest independent reserves report, the oil and gas assets have 2.7 million barrels of oil equivalent (MMboe) of total proved (1P) resources, 3.9 MMboe of proved and probable (2P) resources, and 5.3 MMboe of proved plus probable plus possible (3P) resources, the company said.
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